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China problems, Central Banks & euro riseThis week begins to give a first idea of ​​the economic consequences of the epidemic (so far in the context of China). We are talking about the manufacturing PMI index for China, which fell to 35.7 in February (compared to 50 in January). The non-manufacturing index came out even worse, showing a value of 29.6 (the lowest in history). Recall that any value below 50 indicates a decrease in economic activity. And this is only the first swallow. Then there will be new indicators, and each of them will plunge financial markets into an ever greater depression, at least for some time. Meanwhile, in China itself, the epidemic continues to decline rapidly. In Wuhan (the epicenter of the epidemic), they even began to close the first temporary hospitals due to the lack of patients. But the relay race in China is confidently intercepted by the world as a whole. South Korea, Italy, Iran - current epicenters, which are also not localized, but, on the contrary, spread the virus to other countries. If we draw an analogy with China, then at best for the next month we will find exclusively disappointing news. So you should not count on something good from March. Accordingly, the outcome from risky assets is likely to continue, respectively, gold and other safe-haven assets will find fundamental support. This week we will continue to use the bundle of buying gold - buying USDJPY as a promising medium-term position. In our opinion, the strengthening of the yen, if it continues, will be limited, but the opportunities for gold growth look much more extensive in this regard. Our disbelief in the significant strengthening of the yen is due to the fact that Japan is experiencing serious economic difficulties and traditionally one of the components of the equation to solve them was the devaluation of the yen, so the Bank of Japan is either around 107 or about 105, but most likely it will intervene and prevent the yen from strengthening. In general, central banks are again in the spotlight. Everyone expects salvation from them. As it was during the crisis of 2007-2009. So far, they live up to expectations, since all key central banks have noted rather aggressive statements about their readiness to act. Markets traditionally focus on the Fed. This is mainly due to the current difficulties of the dollar and the frank success of the EURUSD pair. With each new hundred growth points of EURUSD, our desire to sell a pair grows stronger, as does our desire to increase transaction volumes for sale. Part of the dollar’s problems lies in the plane of the presidential election. We try to minimize the analysis of the political plane, focusing on the economy. But today is the so-called Super Tuesday. The day when 1344 of the 1991 Democratic Party delegates cast their ballots for a particular candidate. So far, Sanders is the undisputed leader (probability of victory = 57%), but Biden still has chances (probability of victory = 31%). So the day for the US political sphere is very significant. The pound was under pressure yesterday due to the negotiation process between the UK and the EU on a trade agreement. There is already a familiar game of tug of war and trade for the best conditions, tied to mutual threats. As in the case of Brexit, we prefer to see not the current noise, but the perspective. And it is such that the parties are likely to agree in one form or another. Accordingly, the pound will receive its positive sooner or later. So in the medium term, we do not see any problems for medium-term purchases of the British pound. Rather, on the contrary, we see good shopping opportunities. In current conditions, sales of the EURGBP pair seem ideal to us.
Short
by Trade24Fx
2
GBPAUD and GBPNZD Reversal Set UpsWith all the craziness happening in the equity markets, been looking to the Forex market for some set ups pertaining to my system. GBPAUD had a fake out pattern confirmed. We had a fake out and then a close below this fake out candle. Again, this is why we await candle closes. To avoid being faked out. Wicks are telling, but it is the second candle that matters and gives us the trigger. We got that break, and now awaiting our first lower high swing. Trigger for a short already there, but if you are not in yet, I would await the lower high to form here. GBPNZD is also looking tempting here. A nice uptrend with well defined higher lows and higher highs. We are then seeing a test of a previous higher low swing level and it seems we may make a head and shoulder pattern here. At a very important support/flip zone as well. Will be awaiting the break and close here.
Short
by Uncharted-FX
Are you seeing what I'm seeing?Descending triangle on the GBP/USD: - Price keeps bouncing off $1.29 support level (red horizontal line) - 1-hour chart clearly shows a perfect example of a descending triangle, getting narrower between the upper downwards trend line and the major $1.29 support level - Given a situation where Brexit trade talks fail and tensions rise even more between London and Brussels, then eventually we could see a breakout below the $1.29 level at the end of the descending triangle - However, if Bernie Sanders keeps dominating in the US, then things might go quite differently. Though indication of a bearish pattern is strong here. - If bearish breakout happens, next major support level is $1.28 (green horizontal line) **Note that I am not responsible for your trading decisions. It is solely your responsibility to make your own decisions ;)
Short
by michaeldobfx
ridethepig | Continue To Sell GBP On Rallies Here tracking 1.295x as the level to recycle and load more shorts. Well done those following from the original short-term swing which was triggered on the cabinet reshuffle (see diagram below). As widely expected GBP suffering as markets began to look towards the EU negotiations kickstarting in March. Both sides are very wide apart and no-deal Brexit looks set for year end. The flows are all in-line so far with the long-term macro picture. It is playing out perfectly and looking to sell rallies with risks skewed towards the downside makes sense to me. Medium term targets are located below at 1.21 and 1.15 - these are in play for 1H 2020 if things get very bad with USD strengthening via panic around virus impact and risks while GBP softens as UK lose PPP in the immediate term. Well done those already selling Sterling, and good luck anyone look to load more on rallies. I am happy to sit short and work the sell-side in Cable. The ideas are no less imaginative than those of last year which turned out to be a 1,000 tick trade: Thanks as usual for keeping the likes, comments and charts coming !
Short
by ridethepig
4
EURGBP Is Setting Up to Complete a Regular Flat Pattern.EURGBP decline from August 2019 high can be seen as a classic Elliot Wave five-wave impulse pattern, labeled 1-2-3-4-5. Every impulse is followed by a three-wave correction. That is what seems to be in progress in EURGBP's case. The rally from wave 5 low unfolded in three-wave, followed by another three-wave decline which must have been wave "A" and "B" of a larger A-B-C flat pattern. If this count is correct, this corrective scenario best fit in for a 3-3-5 regular flat pattern according to EW. So it makes sense to expect a five-wave rally in wave "C" to complete the corrective cycle. However, the theory states that once a correction is over, the larger trend resumes in the direction of the impulse. Here, once wave “C” is over, a bearish reversal can be expected. What's your thought on EURGBP?
Long
by Veejahbee
2
ridethepig | EURGBP Market Commentary 2020.02.13A weak session for EURGBP, soft hands continued to bring better sellers in from leveraged accounts and yet the important 0.8300x support still held. I am once again in BTFD mode as pound remains more vulnerable in the entire process as a result of financial services replacement. Risk markets will put more pressure on GBP in general over the coming sessions. Here using dips to buy into with an end of year target at 0.95xx. BOE are already showing signs of distress with the cross below 0.853 which is key via rate differentials. A very technical flow as is usually the case with these cabinet reshuffles we get a retrace in the swing. Adding this to the playbook at the close today with initial targets located at 0.8400, followed by 0.8425 and 0.8450. Invalidation comes into play with a daily close underneath 0.830x. Good luck all those on the bid, same legs are playable in GBPUSD and GBPJPY in particular too. As usual thanks for keeping the support coming with likes and comments!
Long
by ridethepig
3
ridethepig | Fading The Highs In GBP!With Javid out Johnson had the perfect cherry pick with Rishi Sunak and now the fiscal taps can be turned on full. This medium-term swing is starting to look very interesting which is unlocking a leg towards 1.20xx and 1.15xx below: Rishi is a typical yes man, he will do whatever Johnson wants. Those behind the curtain know it was another flawless beheading from Cummings, meanwhile a ruthless Downing Street only waiting for Carney exit on 16th March to have full control with Bailey too. Eyes on NY selling the open, we could get a very fast swing down is USD catches a strong bid via coronavirus risk. US inflation overshooting will be enough to carry this lower. Thanks guys for keeping the likes and comments coming, jump into the discussion with your charts below!
Short
by ridethepig
13
GBPUSD Corrective Wave ContinueAfter the decline in wave ((a)) in red, the price has been unfolding in a corrective manner which is yet to be completed from Elliot Wave's perspective. Wave (a) in blue is sharp, while wave (b) unfolded as a double zigzag and formed a double bottom pattern. This scenario is best fit in for expanded flat 3-3-5 pattern, which according to the EW guideline, a sharp five-wave rally in wave (c) is needed to complete the whole corrective structure. Trading Opportunity: I will wait for the break of the blue line or daily bullish price action signal to take advantage of wave (c) of ((b)). What's your view on GU, bullish or bearish?
Long
by Veejahbee
3
Heads Up...Tax Cuts Coming In UK !!!Important updates on the UK side for those in UK related assets. A game changer cabinet reshuffle to put a 🍒 picked “Yes man” in the Treasury. Downing Street making renovations and now in full control of not only No.10 but also No.11 (and scarily soon to be the BOE next month). Sunak will turn the fiscal taps on full blast, the fuel behind fiscal stimulus will come from fresh tax cuts in the UK ...Clean and simple legs available in the 2s10s, as markets begin to expect a looser fiscal policy a test of the Nov highs are in play. We will need to update the GBP macro charts over the coming sessions once we have confirmation in the headlines. Remember inversions in the US 2s5s setting the stage for recession... We traded the inversion here live in the UK: In any case, plenty of opportunities to discuss and in single stocks too. Smelling a major hammer to the UK economy coming at the end of 2020. As usual thanks for keeping the support coming with likes, comment and etc!
TVC:GB10YLong
by ridethepig
Bulls Eager on GBPUSDWith the current uncertainties keeping GBP pairs consolidated, echoing across correlating Pairs to the Pound, new fundamentals seem like the master key in getting volatility back for FX Traders. Looking over the Pound, one cannot deny that Sterling is at its most cheapest level in years. Forget price and think of value - suggests traders at HuracanFX. Fundamentally : Its a developing high impact news nightmare keeping swing traders on their and somewhat pensive about the next move- and it is likely to develop into a large move at it. Technically : Main 1.30 psychological resistance has been a tough nut to break, as price had shown potential at the first touch but quickly retreating into bearish territory. Note the retest of 1.29 as this resistance can play a vital role of new support for the Pound. USD Weakness coming in to support this move up; however it seems that the pair is looking for more information or a decisive USD move to break from the consolidation pattern. If the main level of 1.30 is broken targets of 1.32 is first up, thus following price up slow and steadily ,creeping its way up to 1.42 with little to no price action in its way to 1.42 from 1.40. Again, looking over to the bigger picture here , the Pound is cheap, overall a bullish momentum as a strong institutional leg from 1.215 Zone. I.e - Why would you be bearish ?
Long
by HuracanFX