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EURGBP - How will BOE decisions affect the pound?The EURGBP currency pair is below the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term descending channel. In case of an upward correction due to the meeting of the Central Bank of England today, we can see the supply zones and sell within those zones with appropriate risk reward. Breaking the specified support range will pave the way for this currency pair to continue its decline Britain’s Treasury Secretary, Reeves, stated that it is still too early to make changes to economic forecasts following the U.S. election. He also expressed confidence that trade flows between the UK and the U.S. will continue under Trump’s presidency, noting that during Trump’s previous term, the two nations had a strong and constructive relationship. Reeves showed optimism about Britain’s role in shaping the global economic agenda. Meanwhile, the risk of a German government collapse appears more serious than ever. The German government has entered a new phase of political crisis that could potentially lead to the final breakdown of the ruling coalition. Last Friday, a document from Germany’s Finance Minister, Christian Lindner, was leaked, outlining his plans for economic reform in Germany. This document analyzes the economic challenges facing the country and offers proposals, such as corporate tax cuts and increased working hours. With internal tensions peaking, the likelihood of government collapse has risen. ECB Vice President De Guindos stated that the European Central Bank is committed to a data-driven, meeting-by-meeting approach and is increasingly confident in achieving the 2% inflation target. Goldman Sachs, in its latest report, has lowered its GDP growth forecast for the Eurozone in 2025 to 0.8%, down from the previous forecast of 1.1%. This revision was attributed to potential threats stemming from Trump’s tariff policies following his reelection.
Short
by Ali_PSND
GBPUSD - UK is on the verge of an important economic decisioThe GBPUSD currency pair is located between EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. In case of correction due to the release of today's economic data, we can see demand zone and buy within zone with appropriate risk reward. If the upward trend continues, this currency pair can be sold within the specified supply zones The UK budget is set to be announced today, Wednesday, October 30, 2024. Analysts at Commerzbank predict that if the budget combines austerity measures with long-term investment optimism, it could positively impact the pound and bolster the UK’s long-term growth potential. The government faces the challenge of stimulating investment to address years of underfunding in the public sector. The difficulty lies in the fact that the UK has been spending beyond its income in recent years, which has complicated its financial situation. Meanwhile, prices in UK stores have fallen at their fastest rate in over three years. However, the budget announcement by Finance Minister Rachel Reeves could help inflation rebound. The annual store price index has decreased to 0.8%, marking the weakest level since August 2021. Food prices have risen by 1.9%, and clothing prices have also increased for the first time since January. Data shows that consumer inflation fell to 1.9% in September. On the other hand, in the U.S., Professor Jeremy Siegel from the Wharton School believes the Federal Reserve may choose to hold rates steady next week if the October non-farm payroll (NFP) report proves very strong. Siegel notes that if the labor market report is robust, many FOMC members may conclude that it’s time to pause. He also predicts that the rate-cutting cycle will include three to four rate reductions, but long-term rates are likely to remain high. In August, Siegel advocated for an emergency 75 basis-point rate cut by the Fed.
Long
by Ali_PSND
GBP/USD -Flirting Resistance *W - Great British Pound seen on a more broader picture of Weekly Time-frame *W (tf) . Flirting with Trendline Resistance that rejected price action on 4 times of interactions previously. Fakeout occurance would be put to stop by 200EMA coming down as Resistance Ceiling for GBP/USD Breakout of Trendline + 200EMA re-testing them as Supports would give much more room for growth regarding GBP Below Supports - Daily Order-Block *D OB - Last Higher Low at 1.18$ - Weekly Order-Block *W OB TRADE SAFE ! *** Note that this is not Financial Advice ! Please do your own research and Consult your own Financial Advisor before partaking on any trading activity based soly upon this Idea.
by Mr_J__fx
4
Virulent inflation raises pressure on the Bank of EnglandThe inflation battle is far from over in the UK. In fact, the nature of inflation is taking a new form as the root cause moves away from external to more domestically driven shocks. While the headline rate remained unchanged at 8.7%yoy in May, core inflation accelerated to 7.1% in May from 6.8% in April, marking the highest rate since March of 19922. In response the Bank of England (BOE) raised interest rates by a bumper 50Bps to a 15-year high. While the Federal Reserve (Fed) and the European Central Bank (ECB) have made progress on bringing down inflation, the BOE still has some ways to go. Current market pricing assumes the terminal policy rate will go to 6% by year end3. UK inflation proving to be virulent The UK has the most severe entrenched inflation problem across developed markets. The domestically driven increase of services prices advanced from 6.9% to 7.4%yoy in May4. As services are labour intensive, they are being impacted by strong wage gains. Employment growth has been stronger than projected underscoring continued robust demand for labour. This high demand caused the rise in weekly average earnings (ex-bonus) to 7.5% in April5, well above the BOE’s forecast. Brexit has been partly responsible for the rise in wages. Brexit reduced the mobility of European workers. The resulting lack of non-qualified workers has not yet been reabsorbed. The situation was clearly exacerbated during the Covid pandemic that left a large part of the workforce sick. The shortage of workers in the UK continues to weigh on the supply side and has been the key reason inflation has remained stubbornly high. The resilient gains in employment (up 1.2% in April 20236) have allowed UK households to continue spending on services. Thereby contributing to higher services inflation, prices for recreational and cultural goods and services rose by 6.8%yoy in May 20237. At the same time, due to the shift away from floating rate mortgages towards fixed rate products over the last decade, the pass through of higher rates is taking longer to feed through the economy, thereby enabling the consumer to appear more resilient. However, headwinds are appearing from higher mortgage rates, with at least 800,000 fixed mortgages due to move on to significantly higher rates in H2 20238. Rents have also been rising, at an annualised pace of 5.6% in May compared to 3.2% in 20229. This is likely to place further pressure on real disposable incomes and simultaneously fuel core inflation higher. The Institute for Fiscal Studies estimates that higher interest rates will cause the average mortgage holder to suffer an 8.3% fall in disposable income compared to a scenario where rates remained at March 2022 levels. For 1.4 million of those borrowers, disposable income will fall by more than 20%10. BOE guided dovish The BOE’s guidance implied that no further rate hikes should be needed bar evidence of more persistent inflationary pressures however the market ignored this. Money markets priced a terminal rate of 6.25% by February 202411. The BoE did not rule out further rate increases should the inflation data continue to be unfavourable. However, they did downplay the unexpected surge in core inflation in May owing to special contributing factors such as the sharp rise in vehicle excise duty and the erratic contribution of airfares and holiday packages. The BOE also highlighted that forward looking indicators are pointing to material falls in future wage inflation which could then lower the pressure on services prices. We share that view, as producer price inflation which tends to serve as a leading indicator for consumer price inflation, eased more than expected in May. The June composite Purchasing Managers Indices (PMI) dropped for a second month in June, showing price pressures easing across the board, suggesting the economy could be turning. Sterling Positive rate surprises are not always positive for the currency. The Pounds muted response (-0.17%)12 to the BOE meeting despite the hawkish surprise and its negative reaction (-0.21%)13 to the hawkish May inflation data suggest that the BOE is prepared to endure a deeper slowdown in order to bring inflation under control. As a growth sensitive currency this is likely to remain an important headwind for the Pound. Sources 1 Bloomberg as of 23 June 2023 2 Bank of England as of 22 June 2023 3 Bloomberg, as of 23 June 2023 4 Bank of England as of 21 June 2023 5 Office for National Statistics as of 31 May 2023 6 Office for National Statistics as of 31 May 2023 7 Bank of England as of 22 June 2023 8 Source: Bank of England, Bloomberg as of 22 June 2023 9 Office for National Statistics, as of 22 June 2023 10 Institute for Fiscal Studies as of 30 April 2023 11 Bloomberg as of 23 June 2023 12 Bloomberg GBP/USD as on 22 June 2023 13 Bloomberg GBP/USD as on 20 June 2023
ECONOMICS:GBINTR
by aneekaguptaWTE
GBPUSD Outlook 1st March 2023The GBPUSD surged strongly to the upside overnight as the price bounced off the previous bearish trend line, rising to retest the 1.2150 price area and resistance level. This move higher was due to the weakness in the DXY following the release of weaker than expected consumer confidence data and the agreement of the deal, resolving the issue along the Northern Ireland border which arose from Brexit. With Brexit no longer an uncertainty for the UK, the GBPUSD could see relatively limited moves to the downside. Early in the trading session today, the GBPUSD again bounced from the 1.20 price level and current price action suggests the potential for further upside. Look for the GBPUSD to retest the 1.2150 resistance level, and beyond that the 1.2220 previous swing high from February 15th.
Long
by JinDao_Tai
15
GBPZAR SHORTThe XA leg of the Harmonic is a Double top in itself. The huge wicks on that leg suggests large institutional volumes trapped in that region. The CD leg just broke through the last order block and we see a confluence on the 1.272 Fib and 2.000 Fib where the CD leg completes. The H1 also gives a beautiful crab pattern competing around the same region. I would say this move may wait for the release oof Non-farm data for a violent take off in the Bearish side and if not enough volume is taken then we may see a retest and a gradual Bearish movement.
Short
by harveygoldfx
1
GBPUSD: Big Fundamentals - New Brexit Deal this weekend?We could be a kicking off the week with a lot of GBP movement if there is a new trade deal reached between the UK and Europe over the Northern Ireland Protocol. Today, Dominic Raab (the UK Deputy PM) told the BBC that the 'UK is on the cusp' of securing a new Brexit deal on Northern Ireland. I'm also seeing GU decline slowing and possibly at the end of it's retracement, DXY also seems to be slowing (it doesn't seem to matter how well their economy is doing, the bears seem to be in control for now), so I'm looking for longs on this pair at the start of next week. We should test recent highs around 1.24 and a break through would open the door to test the 1.26's. If a new Brexit deal is reached this weekend I expect a quick uplift, but I think 'being close to a deal' is enough to see this pair grow over the coming days. This trade gives a 1:3 RR minimum if it works out, I'll be keeping a close eye on the news and the Asian open later!
Long
by Finchcliffe
1
GBPUSD bullish charge higher?The GBPUSD bounced off the 1.1950 price area to approach the 1.2050 price level. Speculation that a deal regarding the Northern Ireland border (arising from Brexit) is close to being reached has brought some renewed upside on the GBPUSD. However, the downward pressure on the GBPUSD maintains due to the bearish trendline providing resistance to any upside move. Whilst it'll be easier to adopt the view that the GBPUSD would reverse from the trendline, back to retest the 1.1950 support level. Consider the possibility that the price breaks above the bearish trendline and the 1.2050 price level to trade significantly higher. This move higher is also supported by the view that the MACD is crossing over to signal a bullish change. In terms of the target level, 1.2430 seems too high and possibly unlikely. However, 1.2260 might be a reasonable target level
Long
by JinDao_Tai
ridethepig | GBP for the Yearly Close📌 @ridethepig GBP FX Commentary for the Yearly Close Here I will start by presenting the following two diagrams: The safety of the Pound turns out to be rather deceptive with a Johnson cabinet which is becoming increasingly weak. And once more, surprise surprise the reason no-deal brexit is being blocked after Biden blockades is a sufficient explanation of the 'rescue' attempt from globalism. So the truth seems to come from the following facts; A lot of Brexit depended on the Trump protection. Without it Johnson is hanging and must scramble back to the EU for security. We can argue about the MT and LT impacts of Brexit but the ST includes a loss of initial market access which is unfavourable for GBP anyway. The flow is clearly balanced towards the downside, despite the dollar becoming quite weak and resistance looks overprotected. We will dig deeper and more frequently into the macro implications again in master praxis to track the inner flows. I will aim to close quite a few more of the original technical maps before we dissect the whys and hows of its worth. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
7
EURGBP - Major Reversal Incoming 🚀EURGBP is ranging perfectly between a parallel descending channel. The nice thing about this pattern is that each wave has an ABC corrective pattern which has been highlighted in ABC. We can see that we're currently on the 5th and final wave, which is the E wave. After this wave, we're expecting a major bullish reversal. In the meantime, we can still trade towards the buy zone by looking for lower timeframe corrections. However, the bigger swing trade is the BUY from the bottom. Trade Idea: - Watch for the completion of E wave either at the double bottom or channel support - once price action appears, enter with stops below price rejection Targets: - Channel Resistance (300pips) - Start of the channel (600pips) Let us know what you think. As always, trade safe!
by WicktatorFX
11
Eurozone 100 gives a hintA few important notes here: We failed to sustain 3500 thus far after 2 breaks above trend and about 10 tests total of the trend in the new year. We haven't retested the low of 3400 which was only tested once/twice since the new year. If you look at what the RSI is telling us about local momentum, we'll see more downside UNLESS we can pull off a 3500 retest, which the market is aiming to do, but is looking rather weak. RSI avg (yellow) hasn't broken below 30 so it looks like an impulsive and risky buy here, rather than a safe buy.
EShort
by fringe_chartist
E100 gives a hintA few important notes here: We failed to sustain 3500 thus far after 2 breaks above trend and about 10 tests total of the trend in the new year. We haven't retested the low of 3400 which was only tested once/twice since the new year. If you look at what the RSI is telling us about local momentum, we'll see more downside UNLESS we can pull off a 3500 retest, which the market is aiming to do, but is looking rather weak. RSI avg (yellow) hasn't broken below 30 so it looks like an impulsive and risky buy here, rather than a safe buy.
EShort
by fringe_chartist
GBP - The money is there, if you play your cards right. One would be forgiven for being distracted by the rigmarole that is British Politics at the moment. Is the Prime Minister on his way out? I think the writing is on the wall on this one. Nevertheless, this will reward those who seek to capitalise on the captain of the ship’s scalp being acquired by his backbenchers he helped shepherd in to office. Looking to the nearer term, inflation is on the rise, rates need uplifting, there is a cost of living crisis — fireworks will dominate today. Looking towards the news, at the outset I expect the UK news to the upside and the US news to the downside. Asia has set the tone for the global session, and indeed those who have heard her beckon, shall undoubtedly be rewarded. Make no mistake. GBP’s attractiveness with the possibility of a rate rise due to inflation and all of its woes, coupled with a Prime Minister who will seek to stay in the driving seat for a while longer (May elex will be important) Plan B measures are set to be scrapped, and for now, the luster of the pound will endure. Buyer beware, however, in the longer term, with the ousting of the PM, issues will again come to the foray such as brexit, the cost of living crisis and an eye watering NHS backlog. Be smart, be careful, be profitable. *this is my first contribution. I hope it helps. I hope I’m right. Right or wrong, I will continue to post my ideas and analysis of fundamental issues which will dominate the first two quarters of ‘22. Conversation is welcome, discourse is key. Thank you.
Long
by EXFXTRDING
1
GBPJPY SHORTThe winter chill this year has not yet come to an end. GB recently had full export customs changed therefore almost all imports in the country have new policies and rules surrounding them. This is going to make doing business here in the UK a little bit tougher for the meantime whilst businesses, companies and individuals adjust. Japan on the other hand have been surging with work due to their already established policies and the vast amount of work they can complete. We can see GBPJPY has now risen to its highest point in our Fibonacci retracement. This is also confirmed with the movement of the RSI and MACD. From the indicators and fundamental information surrounding business, GBPJPY is about to decline further and quite heavily. I anticipate cryptos to be rising in this time as the £ loses some more strength to the yen.
Short
by nkwarteng
EURJPY - Live Weekly Elliott plotAs per plotting of the weekly in Advanced Get - we will update these ideas with daily plots. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
by Mayfair_Ventures
GBPUSD - live monthly Elliott PlotAs per plotting of the monthly in Advanced Get - we will update these ideas with weekly & daily plots. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
by Mayfair_Ventures