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notouch

Cable breaks out of 2-decade range

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I thinks it's worth starting a new thread on this subject because GBP/USD just broke above 2.01, which is it's high from 1992. That's not something you see very often. A breakout of a range is often followed by a big continuation trend. So where's the next resistance for Cable? The chart below suggests there's still a very long way to go - 4000 pips until the all time high. On the other hand it might be a fakeout and come straight back down.

gbpusd041707_1.gif.930427ebf46f6f3bd6f69c45baa73265.gif

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Fundamentals are still strong on the British currency, with desks now pricing in a May (& possible 3rd Q) hike.

 

The pullbacks will be eyed very carefully indeed & now the big psycho level has broken, I wouldn't be surprised to see activity touted to 2.04/05 before any real headwind.

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I don´t plan to get in until the pullback is finished. Very nice move in last 2 days though. I target the move to 2.05 from the rectangle formation beneath the breakout.

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Good point milliard but the Bank of England is still expecting inflation to come back to its target by the end of the year so this breakout could be the peak and the start of a long down move. Price appears to have been rejected this morning above 2.01. A bearish daily candlestick would signal a good swing short.

 

Torero - care to post a chart of the rectangle formation? It would be interesting.

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Interesting chart torero. Here's the way I see it right now but not with enough confidence to take the trade right now. I'm looking for more confirmation that we've reached the top.

attachment.php?attachmentid=1280&stc=1&d=1176900725

cablefakeout.gif.4fdd814944c9df2b79f15f094d7280e8.gif

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It's mostly going to be a psychological battle on the first couple attempts to scale & hold this important hill.

 

The pivot followers are eyeing recent range (month R1) penetration @ 1.9875 & the stall up here @ R2.

 

2.0072-75 is a dual monthly/weekly R2 on the map & price has tickboxed these larger range pivots pretty well since 1.7600.

 

The b/o range top (to bottom support) looks a likely magnet on aggressive & nervous retracement activity if protective Cable Bull pullback activity fails to prop it.

 

I guess we'll soon see how spooked the fast money players really are should the buck sniff a little blood.

 

 

attachment.php?attachmentid=1281&stc=1&d=1176900726

poundpb.gif.d8c8ab632f2892a832efbc898e7f93a7.gif

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Most of the Major pairs have topped last years highs.

Expecting this coming week to complete the rise that started last week.

For now the only indication is upwards, but as the man says, when will it become a fakeout?

 

The market is driven by confidence, but misplaced confidence is how you lose.

Speculators are said to be losing $12M/day???

So the banks have every good reason to flag one direction then send the price the other way.

 

My best quess is that prices will stay high and threaten or promise to go either way, the good cop/bad cop tactic that turns the sucker into putty.

Expect your confidence to be tested with drawdown swings.

The stakes seem higher than usual to me, ugly stuff coming.

Not a good time to be overtrading or low on equity.

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Yes, buy only the bigger dips and get out a bit early.

 

re 1992 record high

The Euro is now in tow and looks to have found its slot in the market.

The balast of the Euro should lessen extremes in Cable.

I think the last year is as far back as we can look, thanks to the Euro.

 

Last year prices hung around the high longer than I like and look like they didn't know which way to go. If we get that this year, scalping the PY dips might be the main option, while looking for a way to predict GBPUSD swings without committing financial suicide.

 

Some of the Swiss pairs might be an easier target than GBPUSD prediction but the range is smaller.

 

CHFJPY and GBPCHF follow or "trade in" PY but not in EU.

USDCHF and EURCHF follow or "trade in" EU but not in PY.

GBPUSD follows or "trades in" both PY and EU which makes it damn tricky to predict.

 

PY and EU are both headed up a notch together, which is one time you can "rely" on GBPUSD to make a good upswing, but it is less common.

What you get is like the last two days, half way there and the banks start playing 100 pip tennis with the PY price instead of firing off GBPUSD as the final stage in trading both PY and EU up together.

Makes it difficult to pick an entry price or time, what you get is days of swaps and drawdown if you get it mistimed. Big prize, big risk, sucker trap if you don't have a well thought out plan.

 

---------------

But if you eat like an elephant and poop like a bird aren't you gunna... explode?!

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Monday morning, BS morning.

Wonder if anyone took a trade.

Been watching the volumes in PY, around 10 lots/min and the price has gone nowhere all morning and it starts to look so darn fake.

Like a bank is trading with itself to make it look like there is keen market interest when there isn't, or maybe to conceal the volume movements that go with a push.

It looks like the charges a bank has to pay on trading a lot must be zero for them to turnover $1M/min just for show.

Hell, if we have no pip margins like them, we could scalp the hell out of them, which kinda tells you what they are doing to us.

1500 gmt I think, got excited, looked like a push, check the volume, fake.

Man I'm getting cynical or paranoid or something.

When?

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Guest cooter

Where are you seeing the "volume"?

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That's not real volume it's either tick volume or bucketshop volume (e.g. InterbankFX or FXDD), both of which are very unreliable.

 

p.s. I hate to blow my own trumpet but my prediction in post #6 wasn't bad eh?

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Guest cooter

CHFJPY and GBPCHF follow or "trade in" PY but not in EU.

USDCHF and EURCHF follow or "trade in" EU but not in PY.

GBPUSD follows or "trades in" both PY and EU which makes it damn tricky to predict.

 

PY and EU are both headed up a notch together,!

 

PYenner,

 

What in the world is this "PY" you're talking about?

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I was thinking the same thing and the Philippines sprang to mind but then I looked at my collection of foreign currency notes and remembered they use the peso. I'm guessing it's PYenner's shorthand for GBP/JPY.

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Yes, PY = GBPJPY

Yes, volume = tick volume

Yes volume indicator vague, it serves me more as a fake detector, stay out message.

There are 3 signals for the PY and EU up together pattern.

They have been there for a week.

Main signal- EURCHF hi (near recent top of market)

Secondary signals- USDJPY hi (near recent top of market)

and GBPUSD lo (300 pips below recent top of market)

Still calling up as long as EURCHF stays up :)

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The recent interest rate rise comes just a few months after the govt complained Sterling was overvalued.

Apparently a further rise to 6% is on the cards.

NZ has already gone down the road of bumbing up rates to curb inflation, then finding the high exchange rate puts exporters out of business.

Thought the Brits would have more brains but thats polititians for you.

 

Sterling near 26yr high-

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=ukPoundRpt&storyID=2007-07-05T073642Z_01_L05223033_RTRIDST_0_MARKETS-STERLING-OPEN.XML

 

BOE to 5.75%-

http://www.dailytimes.com.pk/default.asp?page=2007%5C07%5C06%5Cstory_6-7-2007_pg5_17

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