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WEEKLY LOOK ON GBPAUD - ELLIOTT WAVE ANALYSISHi Ellioticians, GBPAUD weekly time frame suggests a big, bearish, three-wave move to the downside from the 2.71 high. We labeleld a completed impulse in A, followed by a possible completed triangle corrective pattern in wave B, at the 1.954 lvl.. This year's sharp decline, and a break below the lower triangle line is a suggestion that the triangle correction can be completed and wave C underway well below the 1.442 lvl. in years to come. That being said, a break below the 1.744 swing low will be another indication that the GBP is weakning in years to come. The alternate scenario suggests another complex correction to be underway in red wave B. Trade well.
by Gravity33
2
GBPUSD 22nd MARCH 2022 The BoE has raised interest rates by 25bps. But that's not enough to make the bullish sentiment towards GBPUSD going forward. we already know the FED has also raised interest rates by 25 bps. but interest rates are not the only reason when compared to the macro economy, even though inflation is crazy, American fundamentals are still better than British fundamentals. We can see on the D1 chart, support area is now resistance. technically GBPUSD will be bearish this week
Short
by DNP-FX
2
GBP USD - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy Hawkish surprise with a hint of dovish undertones sums up the Feb BoE decision. The bank announced the start of passive QT and hiked rates by 25bsp as expected, but the vote split was unanimous (9-0) but with a big hawkish surprise being 4 MPC members voting for a 50bsp hike. Inflation forecasts saw a big upward revision to a 7.25% peak by April ( prev . 6.0%) & 5.21% in 1-year ( prev . 3.40%). This initial hawkish statement saw immediate strength for GBP but during the press conference the BoE tried their best to get a dovish landing. Gov Bailey started his opening remarks by noting that the MPC’s decision to hike was not because the economy was strong but only because higher rates were necessary to return inflation to target, and even though he opened the door for further hikes he added that markets should not assume rates are on a long march higher. He also acknowledged the stagflation fears recently voiced by some market participants by saying that policy faces a trade-off between weakening growth and higher inflation . Despite the dovish nuances, STIR markets still price an implied cash rate of 1.0% by May which would mean a 25bsp in both March and May (1.0% is the level the BoE previously said they would being outright Gilt selling). Overall, the statement was hawkish, but the clear dovish undertones from the BoE was a bit surprising and also a bit worrisome for the future outlook. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates looks way too aggressive and means downside risks for GBP should growth data push lower, inflation stay sticky, or the BoE continue to push their recent dovish tone. 3. Political Developments Domestic political uncertainty usually leads to higher risk premiumsfor GBP, so the fate of PM Johnson remains a focus. Fallout from the heavily redacted Sue Gray report was limited but with growing distrust from within his party the question remains whether a vote of no-confidence will happen (if so, that could see short-term downside), and then focus will be on whether the PM can survive an actual vote of no-confidence, where a win should be GBP positive and negative for GBP if he loses. The Northern Ireland protocol is still in focus with the UK threatening to trigger Article 16 and the EU threatening to terminate the Brexit deal if they do. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp downside for GBP. 4. CFTC Analysis Friday’s most recent CFTC data showed GBP positioning deteriorated across market participants with big netshort increases for large specs and asset managers, while leveraged funds were more reserved in their reduction of their Sterling net-long (biggest amongst the majors). Who needs to capitulate among these? Given how stretched the recent downside has been, leveraged funds might be better positioned going into the BoE. USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Jan FOMC decision was hawkish on multiple fronts. The statement signalled a March hike as expected, but Chair Powell portrayed a very hawkish tone. Even though Powell said they can’t predict the rate path with certainty, he stressed the economy is in much better shape compared to the 2015 cycle and that will have implications for the pace of hikes (more and faster). Furthermore, he explained that there is ‘quite a bit of room’ to raise rates without damaging employment, which suggests upside risks to the rate path. A big question going into the meeting was how concerned the Fed was about recent equity market volatility . But the Chair explained that markets and financial conditions are reflecting policy changes in advance and that in aggregate the measures they look at isn’t showing red lights. Thus, any ‘Fed Put’ is much further away and inflation is the Fed’s biggest concern right now. The Chair also didn’t rule out the possibility of a 50bsp hike in March or possibly hiking at every meeting this year, which was hawkish as it means the Fed wants optionality to move more aggressive if they need to. We didn’t get new info on the balance sheet and Powell reiterated that they’re contemplating a start of QT after hiking has begun and they’ll discuss this in coming meetings. Overall, the tone and language were a lot more hawkish than the Dec meeting and more hawkish than consensus was expecting. 2. Global & Domestic Economy As the reserve currency, the USD’s global usage means it’s usually inversely correlated to the global economy and global trade. The USD usually appreciates when growth & inflation slow (disinflation) and depreciates when growth & inflation accelerates (reflation). Thus, current expectations of a cyclical slowdown (and possible stagflation) are good for the Dollar. Incoming data will be watched in relation to the ‘Fed Put’ as there are many similarities between now and 4Q18, where the Fed were also tightening into a slowdown. If growth data slows and the Fed stays hawkish it’s a positive for the USD, once the Fed pivots dovish that’ll be a negative for the USD. 3. CFTC Analysis The USD remains a net-long across major participants, but with price action looking stretched and with peak hawkishness for the Fed arguably close with >6 hikes priced, the risk to reward of chasing USD strength is not very attractive right now. Continued stagflation and geopolitical risks it mean that stretched positioning might not be as important as usual. JP Morgan also shared some stats that suggest the USD has a historical tendency to strengthen in the 6 months going into a first hike but then to weaken during the 6 months directly after a first hike. This is an interesting phenomenon which is worth keeping in mind given the USD’s recent performance.
by thunderpips
GBP USD - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy Hawkish surprise with a hint of dovish undertones sums up the Feb BoE decision. The bank announced the start of passive QT and hiked rates by 25bsp as expected, but the vote split was unanimous (9-0) but with a big hawkish surprise being 4 MPC members voting for a 50bsp hike. Inflation forecasts saw a big upward revision to a 7.25% peak by April (prev. 6.0%) & 5.21% in 1-year (prev. 3.40%). This initial hawkish statement saw immediate strength for GBP but during the press conference the BoE tried their best to get a dovish landing. Gov Bailey started his opening remarks by noting that the MPC’s decision to hike was not because the economy was strong but only because higher rates were necessary to return inflation to target, and even though he opened the door for further hikes he added that markets should not assume rates are on a long march higher. He also acknowledged the stagflation fears recently voiced by some market participants by saying that policy faces a trade-off between weakening growth and higher inflation. Despite the dovish nuances, STIR markets still price an implied cash rate of 1.0% by May which would mean a 25bsp in both March and May (1.0% is the level the BoE previously said they would being outright Gilt selling). Overall, the statement was hawkish, but the clear dovish undertones from the BoE was a bit surprising and also a bit worrisome for the future outlook. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates looks way too aggressive and means downside risks for GBP should growth data push lower, inflation stay sticky, or the BoE continue to push their recent dovish tone. 3. Political Developments Domestic political uncertainty usually leads to higher risk premiumsfor GBP, so the fate of PM Johnson remains a focus. Fallout from the heavily redacted Sue Gray report was limited but with growing distrust from within his party the question remains whether a vote of no-confidence will happen (if so, that could see short-term downside), and then focus will be on whether the PM can survive an actual vote of no-confidence, where a win should be GBP positive and negative for GBP if he loses. The Northern Ireland protocol is still in focus with the UK threatening to trigger Article 16 and the EU threatening to terminate the Brexit deal if they do. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp downside for GBP. 4. CFTC Analysis Friday’s most recent CFTC data showed GBP positioning deteriorated across market participants with big netshort increases for large specs and asset managers, while leveraged funds were more reserved in their reduction of their Sterling net-long (biggest amongst the majors). Who needs to capitulate among these? Given how stretched the recent downside has been, leveraged funds might be better positioned going into the BoE. 5. The Week Ahead For the week ahead the data focus will fall on the incoming labour report, with more focus on the wage component as opposed to the headline jobs print. The bank is concerned about second-round effects, so much so that Governor Bailey has in previous weeks said that workers should not demand exuberant increases. We also saw from the Bank’s Agents report suggesting there are signs of significant wage increases this year. Thus, goes without saying that wages will be important. Even though higher wages could see short-term GBP upside, what it means med-term is arguably more negative as it adds to further stagflation fears. For the BoE meeting, markets are fully pricing in a 25bsp hike which means all the focus will fall on the tone and language. The bank’s commitment to lower inflation will be in focus, especially as it relates to growth. Recall that at the Feb policy press conference and the MPC hearing, the bank was already concerned about what higher inflation and higher rates would mean for the growth outlook. That has now arguably been exacerbated by the Ukraine/Russia war. The one risk to the meeting is from the hawkish side, where the GBP’s drop is something, they would have noticed. As lower currency valuation feeds into higher inflation, they could sound less dovish, but at this stage that would seem like an unproductive way of easing inflationary pressures (but not something to completely reject as an option). Our baseline is for a continued dovish tone, but unless they come across even more dovish than before, the recent stretched downside in the GBP could offer some short-term relief higher. USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Jan FOMC decision was hawkish on multiple fronts. The statement signalled a March hike as expected, but Chair Powell portrayed a very hawkish tone. Even though Powell said they can’t predict the rate path with certainty, he stressed the economy is in much better shape compared to the 2015 cycle and that will have implications for the pace of hikes (more and faster). Furthermore, he explained that there is ‘quite a bit of room’ to raise rates without damaging employment, which suggests upside risks to the rate path. A big question going into the meeting was how concerned the Fed was about recent equity market volatility . But the Chair explained that markets and financial conditions are reflecting policy changes in advance and that in aggregate the measures they look at isn’t showing red lights. Thus, any ‘Fed Put’ is much further away and inflation is the Fed’s biggest concern right now. The Chair also didn’t rule out the possibility of a 50bsp hike in March or possibly hiking at every meeting this year, which was hawkish as it means the Fed wants optionality to move more aggressive if they need to. We didn’t get new info on the balance sheet and Powell reiterated that they’re contemplating a start of QT after hiking has begun and they’ll discuss this in coming meetings. Overall, the tone and language were a lot more hawkish than the Dec meeting and more hawkish than consensus was expecting. 2. Global & Domestic Economy As the reserve currency, the USD’s global usage means it’s usually inversely correlated to the global economy and global trade. The USD usually appreciates when growth & inflation slow (disinflation) and depreciates when growth & inflation accelerates (reflation). Thus, current expectations of a cyclical slowdown (and possible stagflation) are good for the Dollar. Incoming data will be watched in relation to the ‘Fed Put’ as there are many similarities between now and 4Q18, where the Fed were also tightening into a slowdown. If growth data slows and the Fed stays hawkish it’s a positive for the USD, once the Fed pivots dovish that’ll be a negative for the USD. 3. CFTC Analysis The USD remains a net-long across major participants, but with price action looking stretched and with peak hawkishness for the Fed arguably close with >6 hikes priced, the risk to reward of chasing USD strength is not very attractive right now. Continued stagflation and geopolitical risks it mean that stretched positioning might not be as important as usual. JP Morgan also shared some stats that suggest the USD has a historical tendency to strengthen in the 6 months going into a first hike but then to weaken during the 6 months directly after a first hike. This is an interesting phenomenon which is worth keeping in mind given the USD’s recent performance. 4. The Week Ahead The week ahead for the USD will be dominated by ongoing geopolitical tensions as well as the incoming FOMC meeting. On the geopolitical front, escalation and de-escalation will affect safe haven flows which means it will remain an important driver for the USD, especially with rising commodity prices also stoking growing fears of stagflation. On the FOMC side, a 25bsp hike is fully priced, but markets still have a lot to think about as the March meeting will be accompanied by an updated Summary of Economic Projections, where the markets want to see how the dots have changed (previous meeting showed 3 hikes for 2022). STIR markets currently priced in close to 7 hikes, so anything below 5 ought to be seen as dovish. During his recent testimony, Powell said that markets have responded to their guidance with good transmission and have priced in a much higher tightening path, so if their tone and comments alone have done so much heavy lifting there isn’t much reason for them to suddenly ease off on that. It’s true that the Ukraine/Russia war does add uncertainty, but with the US economy and financial sector far less exposed to Russia compared to Europe, the biggest ‘risk’ from the geopolitical situation is higher commodity prices that feeds into higher inflation expectations. Thus, even though the war adds uncertainty (and the Fed is likely going to say that it does) there is very little reason for them to ease off right now, especially with political pressures building going into the mid-terms. But won’t the Fed be concerned with asset markets by coming across even more hawkish? Despite growth concerns, a war in Europe, global sanctions, additional commodity supply shocks and expectations for 6 Fed hikes and QT, if the S&P is down less than 14% with all of that going on it means that any ‘Fed put’ is probably much further away and no need for the bank to change their tone just yet. How far a hawkish Fed can push long-end yields and the USD is up for debate though.
by thunderpips
2
GBP/USD Hello traders; This is the GBP/USD daily chart. We have a strong downward thrust and I think it is time to look for long trades in the near future. As you can see we have confluence in the area where the price is currently and which include: 1.618 butterfly BUY + market oversold + bottom line of the channel. So considering a long position seems reasonable, but at the same time keep in mind that you need to see some bullish price action (don't try to catch a falling knife) and of course keep in mind that we have a FED interest rate decision, so expecting volatility also seems reasonable.
Long
by merjemascerija
2
ICT Short EURUSD OTE Entry (just mute, I cannot disable laptop mic) Another example of an NY trade today, Shorted the higher time frame bias, Have marked the chart up to show my logic, When you determine what you are looking for to fit criteria pre market and pre trade IE ( A rules based system) its much easier to sit back and wait for the boxes to tick themselves, I dont force trades and I don't make the market give me something, I just ride the wave. This is another FTMO DEMO ACCOUNT pass for me while still testing this Strat, in just this trade. The market is making these moves everyday, Deciphering the chart and looking for evidence is all I do, It doesn't need to be more complicated, I truly believe that, I know my chart looks dirt but I've written all over it for this video and I'm also colour blind so trust me, In my eyes its beautiful (lol) - Side note, If your studying ICT or OTE etc etc hit my inbox to join a discord with me, I'm not selling anything I'm not looking for anything other than to exchange ideas with like minded people as trading is a lonely game, What ever stage of your journey you are at. Hit me up lets start a conversation, Especially if your a London / NY session trader..
Short
by hunterprotocolFX
1
GBP/USD may drop first before it pulls back to the upside. GBP is a bit under pressure after BOE delivers a dovish statement. But GBP/USD is still supported because of the USD's weakness. Market commentators said that the sanctions announced by the US against Russia on Tuesday weren't as harsh as feared, facilitating the broad rebound in risk assets and selling pressure on safe-havens. Market commentators also noted that US officials also committed to implementing further sanctions on Russia if needed. But still, GBP/USD has big chances to go upside. 1.3640/1.3650 is identified as a trendline and horizontal resistance from the price zone. So, as long as GBP/USD is below the resistance level, it has chances to drop first. But if GBP/USD can break above the trendline resistance, the scenario will be different than it has a long way to go upside. On the other hand, 1.3500/1.3480 is a powerful support zone. So, as long as GBP/USD is above 1.3480/1.3500, there will be a strong upside bias. So, if GBP/USD drops nearly 1.3500/1.3480 price zone, it may be a wise decision to play into buy with stop loss below the 1.3420 price zone. On the other hand, If GBP/USD breaks above 1.3650, there will be an explicit confirmation of upside breakout. Our first target to the upside is 1.3740/1.3750. Breaking above 1.3750 will open the door for 1.3820, and the final target to the upside is the 1.3950/1.4000 price zone.
Long
by Gold_Trading_Expert
2