Huge hit on risk right now across the board all instruments.
OK - guys who protected their profit for this week on Gbp/Usd were wise as price hit Monday’s 10.00am entry point and found buyers there - has the dust settled yet - possibly but I’d give it another while.
Huge change in risk this morning - new highs in US indices last night and lots of euphoria - then this morning came the announcement of Austria new lock-down - first inkling was on the German Bund (price)
At the same time Yen jumped and Euro got sold against USD - immediatly Gbp longs exited with the anticipated USD buying.
What caused it? - the catalyst is the Austrian news and the associated fear that neighbouring countries will follow suit - how to tell?
Easy - check the US futures - all in free-fall except the Nasdaq which although down is much less so - and techs do ok in lockdowns.
Panic selling can be difficult to gauge as to when it stops - hence that very old saying about catching a falling knife.
Knife has now hit the floor and is wobbling a little - picking it up must be done with care
Week for Gbp now over - many analysts have termed it ‘topsy turvy’ but it was not so - my posts were very much biased on the buy side whereas the previous week was the opposite.
My focus is always on the right side of the chart and at weekend it’s time to reflect.
Last Friday at close there was a new member who posted that he/she was always on the wrong side of Gbp and could never make money on FX - I suggested maybe a thought toward FA and perhaps think about a long at 10.00am Uk time Monday past.
Likely that never happened since there was no response but on Monday past at 10.00 am this happened:
What’s the biggie
Well during the panic buying of USD today - where lay the GBP buy orders:
Anyways good week for Gbp buyers - so what is up ahead?
Weekend risk is the NI/UK/EU but reports seem ok, as always talking heads at the weekend will have an influence so maybe wait until Monday 10.0am UK time
Edit: here is where I suggested re buying Gbp 10.00am this week:
I am an expert at wrong entries - Trading Discussion / Trade Journals - BabyPips.com Forex Trading Forum
Sunday night and the weekend risk is almost over.
On Gbp the risk of a trade breakdown EU/UK is very slightly down. On the plus side talks will continue, 2 US senators, one republican and one democrat have written to the UK PM expressing the bi-partisan interest within Congress on protecting the GFA - on the minus side lord Frost states significant gaps remain.
On balance GBP positive thus the market will remain focussed on likely int rate rise in Dec.
On the USD side of the equation there have been huge and often violent protests in Austria, Holland and more recently Brussels against Govt actions on covid. Media coverage will encourage USD buyers at least for tomorrow Monday.
So expectation for Monday for me will be more of a wait and see first how the German Bund behaves in the morning and later the US 10yr.
Some USD buying - as expected :Powell will remain for next 4 yrs so giving a little boost to usd buyers.
Good chance a week to be side-lined given the US hol Thu and likely hangovers Fri.
Ok - week now over and Hangover Friday had a sting in it’s tail.
This thread title is intended to focus on current affairs and it’s market effect - on Friday past the ‘news’ was re a covid strain first detected in South Africa and reported to WHO on Friday.
When markets are thinner then current affairs (news) will often have an exaggerated effect on price and when that happens then it’s down to luck which side a trader happens to be on.
For that reason I cautioned that perhaps a good week to be side-lined.
New month - what’s changed up ahead?
Well actually same old - Leebax on his Eur/Gbp thread mentioned a buy after the daily doji - and of course a doji represents indecision - much like i mentioned way up above re management by committee by the BOE and the market’s perception of indecision by it’s current chairman and committee
Will they be more decisive in a couple of weeks - the market is selling Gbp and thus I suspect it thinks there will be action - only possible to buy low if price is low.
On current affairs there is nothing much to report - the threat of EU/UK trade barriers is somewhat on the back burner - consensus is that it talks on NI protocol will run into next year, the US are holding back on lifting Trump era tariffs on UK metals despite having lifted same on EU - likely will be sorted in tandem with the NI talks - bottom line is BOE rates decision.
Hi peter -
I note you interpret GBP selling as a pre-cursor to buying. You’re not on your own with this - my broker reports 58% of clients with open GBP/USD positions are long: its 82% long GBP/JPY, 62% short EUR/GBP.
Of course, 69% of their clients are losers.
Just saying, just saying…
Aye, over the years i’ve noticed that if the fundies suggest a buy on Gbp then price will go down beforehand or vice versa - just the way the market seems to play Gbp…
Thing is this is Dec and the numbers get fudged - the only focus on the pound for this month is the mpc - (Dec 15th)
If Carney were in charge then def a raise - but like I say the current set up is a bit more indecisive
Happens too that Dec is a good month for Euro so guys selling Gbp in anticipation of that.
As for brokers’ numbers - not long ago Wyckoff suggested to brokers the need for education - he was derided for even thinking such.
Anyways the good news is that generally TA rules in Dec - keep safe and have a good Christmas
The dollar rose on Monday against safe-haven currencies such as the yen and Swiss franc after some reassuring news on the Omicron COVID variant, while units like
the Australian dollar that have been battered by growth worries also caught a bid.
U.S. Treasury yields rose and stocks gained after news that
initial observations suggested Omicron patients had only mild symptoms, reversing some of Friday’s heavy selloff.
Quick update on GBP outlook - there was a report today at around lunchtime UK that “progress made on NI protocol”.
We have had this before but significantly this time it has come from the UK side - that news took a while but eventually caused some GBP buying.
At the same time SocGen are reporting that “the bears are hungry” in relation to GBP - no doubt encouraged by the poor GDP numbers.
This conflict in sentiment is perhaps the difference in short term and long term outlook - sort the endless argument between UK and EU is GBP positive in the short term - the long term is a little more difficult.
Another rate decision by BOE coming up - omicron has changed the dynamics in the market - likewise last months lack of decision by the bank as mentioned up above.
Meantime prices in UK continue their march upward - 5.1% CPI recorded this morning.
More dithering will add to pressure.
Reuters ran a good piece on market thinking this morning in relation to the current BOE management and it’s effect on investors and thus the UK Bond market (called Gilts in the market)
There are 2 opinions right now on BOE rates - one it will be a coin flip either way or the second is that the BOE will do the same as last month, i.e. keep rates on hold.
Coin flip believers will stay out or use buy and/or sell stops and the second cohort will have already faded this morning’s rise in GBP/USD in line with the above quote.
Hate fence sitting so my own opinion is that the faders will be ok.
Update: - faders’ SL hit - they have raised - end of dithering.
While since I posted here - the one item on current affairs that has the potential perhaps to have the greatest effect on the market for many years is currently being played out in Moscow and Kyiv.
I mentioned the other day on Dennis’s BTC thread here that the market has an expectation of success or at least a glimmer of hope - based on the fact that M Macron decided to put his reputation on the line despite election in April coming.
Sound bytes coming from the Kremlin this morning are more positive than they have been of late - the focus now shifts to Kyiv today.
Resolution of this disagreement will naturally have a positive effect on all risk assets.
Edit: The US is playing the role by keeping the pressure up - Pres Biden affirmed yesterday evening when referring to Nord Stream 2 and the result of a Russian invasion of Ukraine - “I promise you we will bring an end to it.”.
Russia stands to gain financially when the gas begins to flow via this pipeline to Europe.
That hint of optimism actually came from the French side - latest coming from Kremlin is more bleak -
Copy of Reuters report:
- The Kremlin denied on Tuesday that Vladimir Putin had promised French President Emmanuel Macron that Russia would stage no further manoeuvres near Ukraine for now, pouring cold water on a tentative French assertion of diplomatic progress.
Here’s a real interesting take on the rising tensions with Russia. Talks of how while the world is focused on UKR how there’s so much more development in the Scandanavia, like the undersea cable disconnection in Svaalbard and troop buildup in Gotland, and a possible war that’s already begun but in the non-traditional sense we see war.
Latest from M Macron today;
“I secured an assurance there would be no deterioration or escalation,” (to reporters before his meeting with the Ukraine leader.
The Kremlin are say no specific guarantees were made so likely somewhere in between lies the truth - the market seems reasonably assured that war is not imminent with the indices rising steadily.
Later the Presidents of France and Ukraine gave a joint press conf - main message is that the problems can be resolved peacefully.
The world awaits.