Here's the updated GBP weekly chart.

im bearish on both GBP & Eur against USD longer term, hence using larger timeframes....






dl.dropboxusercontent.com/u/40497882/GBP_USD17May.jpg

rgds WS

Long @ 1.5300
SL @ 15190

Worth a long on first attempt of trend line at 15340 with tight stops.
This is a first attempt trade only...

keep an eye that 50% & 61% fibo's also looks like it wants to back test the main trendline...

dl.dropboxusercontent.com/u/40497882/GBP_USD29Apr.jpg

There is a nice scalping short opportunity from the top of the channel and 161.8% extension at 15552



Best wishes

ft

This looks like its heading for a test of the new up trend line(1.5172). Worth a long on first attempt only with tight stops.

This ones playing out nicely so far
This should be a free trade now .

By my reckoning this should make 1.5600 ..... but it's got a bit to do

should be a free trade now
Im gonna add to this once it breaks past 1.5350. So my order to top up is at 15355.. This is based on the inside bar.

Just noticed this whilst doing inside bar trading:
broken its down trend-line recently, possible 123 low breakout, which it retested and there is also an inside bar today as well.

Purely from a price action point of view - what do others think about ~1.53 being a new key resistance point after breaking below this.

Or could it break that to find a potential oblique/MA resistance?

Closer up:




I'm looking at the period of May-August 2012 when it formed a rising wedge formation, broke out, then came back down and retested that area before continuing the rise as a past precedence.

Is GBP A Currency Crisis Waiting To Happen?

Mar 18 2013

Page 2:-

As we have pointed out numerous times, the UK has a serious debt problem. In fact, when it comes to external debt (i.e. the amount of debt provided by foreigners), the UK is in a league of its own, even when compared to other currency crisis candidates, such as the JPY. This puts GBP at risk, as a capital flight out of GBP could be triggered if foreign investors lose confidence in the UK.

(click to enlarge)

However, when looked at on a net basis (i.e. when foreign assets, as well as liabilities, are considered) things begin to a look a little better. The UK's net liability position is 'only' 15% of GDP, which is very much in line with the European average - although much worse than the UK's 'high point', reached in 1986, when the UK actually had a net foreign asset position of 22% of GDP (amazing what a persistent current account deficit will do to your solvency!).

However, even when looking at the net position, there are some ominous warning signs for GBP. Notably, whilst almost all of the UK's foreign assets are denominated in foreign currencies, about 2/3rds of the liabilities are in GBP. Whilst this is good news from a solvency point of view ( a country it is much less likely to default on liabilities denominated in the domestic currency as it can just print more), it provides a strong incentive for the UK to devalue the pound. In fact, the GBP devaluation in 2008 resulted in an improvement in the UK's international investment position of approximately 34% of GDP!

It is also worth noting that while the UK holds a strong position in direct investments (net assets of +27% of GDP), it has a relatively weak position in portfolio investments (net liabilities of -38% of GDP). This is important when assessing the likelihood of a currency crisis, as portfolio investments are much more mobile (i.e. 'hot money') and susceptible to capital flight.

The second risk factor when assessing the probability of a currency crisis for the UK relates to productivity. A lack of domestic productivity can be a catalyst for a currency crisis for two reasons:

1) It leads to a current account deficit, placing direct pressure on the currency; and

2) It provides an incentive to devalue the currency to improve productivity.

Again, the signs are worrying for the UK on both counts. The UK has run a current account deficit (i.e. it imports more than its exports) since the early 1980's (which is one reason why its robust net asset position in 1986 has now become a net liability position, as highlighted above). Not only is this current account deficit position persistent, but it is deteriorating (it is now back to the highest level it has seen since the last current crisis in the early 1990s; about 3% of GDP).

In addition, UK productivity continues to lag that of other industrialized countries. As of 2011, UK productivity was 21% lower than the average of the rest of the G7, on an output per worker basis! The reason for this underperformance is not entirely clear (indeed, the 'productivity puzzle' has been one of the most widely debated economic issues in the UK since the financial crisis). However, this productivity gap does represent a clear and present danger to GBP, as the government and the Bank of England will be continually tempted to devalue the currency as means to reduce this gap. As the Sunday Times' Economics editor David Smith wrote last week: "I am no longer sure monetary policy is safe in (the Bank of England's) hands…short of erecting a sign on the front of the Bank saying "Sell Sterling" it could barely do more to signal its desire for a lower pound."

The third factor which threatens the integrity of the pound is current UK monetary policy, and the stated intention to, in the words of Chancellor Osborne, combine "fiscal conservatism and monetary activism" to resolve the country's economic woes. Regardless of whether or not this strategy is the right one for the country, what is clear is that this can be a lethal combination for the currency. Current government policy is, in effect, shorthand for debt monetization and currency debasement. Rather than borrow money to stimulate the economy, the government will simply print it instead. As a result, the extent of money-printing by the Bank of England currently dwarfs even that of Bernanke's Fed (QE represents 26% of GDP in the UK, versus a comparatively conservative 14% of GDP in the US).

As such, we cannot disagree with Mr Jijsselbloem. The risk factors are clearly in place for a sterling crisis: 1) a large external debt position, with foreign currency assets and domestic currency liabilities; 2) uncompetitive domestic economy; and 3) large scale unconventional monetary easing. Whether these factors actually lead to a sterling crisis in the coming months in less certain; it is unlikely that the UK government would like to see a disorderly currency depreciation (and the risk of initiating one may curtail their money-printing ambitions), and other currencies, notably the USD and the JPY, face problems of their own. However, it is important to at least consider the possibility of a sterling crisis manifesting itself in the coming months; it's not like it hasn't happened before.

---

No Charts and I don't trade currencies.

Following this week's budget where Mark Carney has been given new tools, I thought I would highlight a few recent articles re UK and Sterling:-

---

www.dailymail.co.uk/news/article-2296676...-Osbornes-bacon.html

"It is not yet clear what ‘unconventional’ methods Carney will use. But there are plenty of hints buried in the Budget documents. Among those listed are further rounds of printing money beyond the £375 billion already undertaken."

---

seekingalpha.com/article/1283801-is-gbp-...is-waiting-to-happen

Is GBP A Currency Crisis Waiting To Happen?

Mar 18 2013, 14:49 by: Kevin Lester.

( includes: FXB, GBB Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.)

The idea that the UK is facing the possibility of a full-blown currency crisis has gathered increasing momentum since the start of the year, as GBP has continued to battle with the JPY for the dubious distinction of being the world's worst performing major currency (for the record, the JPY has once again pulled ahead in this race to the bottom). Speaking in Amsterdam last week, the Dutch finance minister, and president of the Euro Group, Jeroen Dijsselbloem warned "England is vulnerable…a new sterling crisis could happen again."

Before we get into whether such speculation is justified, or merely hyperbolic European schadenfreude, it is useful to first define exactly what a currency crisis is. Traditionally, a currency crisis is associated with fixed exchange rate regimes (such as the last UK currency crisis in 1992, when GBP was a member of the ERM), and occurs when speculators determine that the peg is unsustainable (normally because it overvalues the currency).

However, a currency peg is not a prerequisite for a currency crisis, which may be defined as a "dramatic change in the country's nominal exchange rate" (Temin, 2013). As GBP (FXB) has no formal peg, a currency crisis could perhaps be linked instead to its 'fair value', as measured by purchasing power parity. Currently, using the OECD methodology for calculating purchasing power parity, GBP/USD (GBB) should currently be trading at about $1.47 on a 'fair value' basis (interestingly, despite the recent poor performance of GBP, it still trades at a premium to the USD; against the EUR it looks about 10% undervalued).

As such, if we use the USD as our benchmark, it would perhaps make sense to view any GBP depreciation of 25% or so below 'fair value' as a GBP 'crisis'; this would imply a GBPUSD spot rate of about $1.10. Such a level may seem implausible, but we have been there before, during the currency crisis of the mid '80s, GBP/USD hit a low of $1.03 (it had been trading as high as $2.40 less than 5 years previously).

So what could trigger a GBP crisis that could see such a significant currency devaluation? Traditionally, there are two (related) factors that can trigger a currency crisis: 1) an unstable external debt position; or 2) a declining level of national competitiveness (often resulting in a large and / or persistent current account deficit). I would also be inclined to add a third factor, in light of the current economic environment: the excessive use of unconventional monetary policy (i.e. quantitative easing) to stimulate the domestic economy. The bad news for the UK is that all three risk factors represent red flags for GBP.

(Only copied page 1 as keeps rejecting my registration to get page 2)

Buy some gold I guess for non currency traders as a hedge?

Maybe not mid-term but definitely possible long term. There should be a bounce off the 2009 low which was either 1.32 or 1.35 (can't remember offhand) but the whole sequence since then appears to have been a continuation symmetrical triangle so a new low below 2009's would be likely to complete the move down from 2007/8 highs.

I've been waiting a while to get a decent short entry since the uptrend support broke but I missed the 1.523 backtest.

There is support here at 1.4944 so maybe a bounce there and then short it. Sorry, no chart yet. Will try and post one a bit later.

Weak £ is good for UK Plc though.

Just saw this and nearly fell off my chair.

Check out the last chart in the link below for gbp/usd
www.ew-forecast.com/newsletter/

Is this a realistic mid term target??

you see the power once it got abv that 15040 level ....

Here's a couple of updated charts close up and from a far....

interesting close & candle, just dipped below the line, this really needs to start turning up above ~15040 level or else you can estimate some further downside targets here, all on the chart to see, maybe we get a morning start effect. look how it also reversed back down from 15233 level to close at the lows again. 15233 key level now for any upside momentum.

dl.dropbox.com/u/40497882/GBP_USD.jpg

dl.dropbox.com/u/40497882/GBP_USDMarch02.jpg

i closed my second long on this yesterday from 15084 @15185 and closed my short banker from 15884 today @ 15024, i think i may regret closing it tho. new month new beginning, cant complain been a good ride this.

trend is clearly down on this. would not surprise me to see this mid 14000's tho, will take a look over the weekend.

Under 1.5 today? Looking that way.

Sizing up a 1st attempt basis only counter long at 15000 with tight stops for a quick bounce trade.

I've actually have gone long on this, came within touching distance of my trendline as per previous post, currently 50 pips up and have banked 1 position will leave the other as my short cover.

dl.dropbox.com/u/40497882/Weekly_GBP_USD_upclose.JPG

nice doji printed on daily and if next candle can stay that way they it's got a good chance to fire up a bit more... need confirmation tho.

hoping it be a nice short term swing.

My stop activated straight away . Worse off by about 40 pips past my stop.
Like I said earlier. It's all dodgy the way they handled the release. It's like they wanted to make money by the down grade.
If they even waited 5 mins after the close of the currency market I would have closed my order to open and not taken a hit.
Oh well ...nothing I could do about this trade. This is part of the trading. Just don't like being robbed...lol...
That's the downside to trading.You can't control news especially on the currency market.
Nice lesson in trading here. You can't always have it your own way. Expect the unexpected.
Now waiting patiently for another trade .

This the weekly:

dl.dropbox.com/u/40497882/Weekly_GBP_USD.JPG

WaveSurfer wrote:

that's exactly the mind set i'm looking for - how low will it go and thus probabilities suggest GBP will go on a bit of a rally now. lol

cant load up my ig charts, but from what i saw on Friday night it looks exhausted now and the recent action maybe priced in and perhaps time for it to go on a bit of a rally before it dumps again.

all imo.

Last time I bought a big hammer at a key support it made a bearish engulfing the next trading day lol! Hope that doesn't happen to you remo, old chap!

Now that the main uptrend support has gone I'm gonna wait for a good short entry rather than consider any more longs.

The 2009 low was 1.3200 and there's an active P&F target at 1.3500. That would be proper bad news for those of us overseas but earning in Sterling so a nice short would be a good hedge against the falling strength of GBP. I'm looking at possibly going short at 1.545 if it rallies to there. Will have another look later this weekend.

My long activated on this on friday night. It sure did move fast. I hate it when theres a shock to the system as that can mess trades up. Im surprised that they announced the downgrade on a friday night. They could have done this once the currency market was closed. maybe on a saturday. It smells all dodgy to me.

1 Pez 1 wrote:
And again on Monday by the looks of it with UK not having AAA anymore (Germany and Austria still do).

Most in my watchlist FTSE 100 down on Thursday with GBP fall/+ some Fed comments and small rises on Friday and down again on Monday maybe?????????? (I don't trade currencies but have been watching the GBP fall, how low will it go? - need to make more monies now with a falling GBP, before transfers overseas )

Dipped from 1.52510 @ 22.20 UCT Friday 22/2/13 to 1.5147 @ 22.50 UCT Friday 22/2/13 just before the close.

GBP/USD 1.48?

Soon see on Sunday with Asian trading from 20:15 GMT on Sunday.

Ive got my long entry half way down the hammer at 1.5203. My stop is 70 points.
The hammer formed at strong support area
dyor

1 Pez 1 wrote:
I closed a short GBP yesterday morning.... kicking myself now, considering that the technical consensus is around 1.52!

oh well, better put that cash to good use

Anybody playing with this? Huge spike down this morning.

I had a SB short open - then suddenly like a tsunami my stops got triggered and it went my direction.

One for my notebook - never trade before market moving announcement on FOREX.

Looks like a clasic breakdown of a consolidation triangle if you go back long enough remo. Could be bad long term for GBP but that's normally good for the economy and exports I guess.

Probably have to be looking at a short on a backtest of the trendline if it closes below.

Really weird day today considering yesterday's rejection of sub 1.56.

That was a short lived trade of mine.
back on the sidelines . The fact that it finished below the hammer means it could be down from here on. If it does finish the day below the hammer it will mean a trend line break as well.

Yeah, same in the Euro pairs over the last few weeks with some big false breakouts and huge daily price moves.

Time for me to step aside and wait on the sidelines for trends to re-establish.

Some seriously crazy swings going on here...

Im going long half way down the hammer as the hammer formed right at support and my stops are below the hammer.
So my entry is at 1.5620
stops are below 1.5570
so risking 50 pips



DYOR

I'm still waiting for end of day but looks like there could now be a hammer on a bullish RSI divergence (daily chart) with a close above the uptrend support.

waverider2 wrote:
you almost had me there man! It does look like a fez to be fair.

Your 15mins chart looks like its completed a double bottom - from an intra-day point.

Finding the GBPUSD price action somewhat emotional as I hold USD (part of work pays in USD but my "liabilities" are in GBP).

Can't we just go back to bartering with cattle, bushels and gold coins?

Charts attached:

dl.dropbox.com/u/4385922/GBPusd.png

Bullish divergence plus engulfing candle which is taking it up

HI Libero - it seems that this chart pattern is actually called the Morrocan Hat pattern

Can be very bearish and then bullish then bearish lol.

on a more serious note - I have been analysing the 15 mins chart - and it seems pretty bullish (again)

I might be seeing things, but to me there looks like a very crude Head & Shoulders set up on the hourly.




Like I said, I might be seeing things (on another day, it might be a head and shoulders shampoo bottle but hey ho!)

Either way, Cable took another hit with its latest CPI readings (admittedly this news causes only a short term downward spike, but if the general sentiment is bearish, it could just compound Sterling's misery!)

One final note, notice that since the 6th of Feb the 20MA was acting as support? but this recently turned into resistance.

That's why I only ever trade the first attempt of a trend line.
As can be seen from your chart it bounced on the first attempt but an attempt after a few days latter will increase the chances of a breakout.
Also the US Dollar index has recently bounced of the neck line of the head and shoulders and now has even broke a short term down trend line. Views can change so quickly on the currency market.

The bounce off the uptrend support seems to have been quite short-lived. Hope profit was banked and stops placed. Looks now like it could be a bit bleak for the GBP in coming weeks as that was the uptrend from 2009 lows:



dl.dropbox.com/u/20815047/GBPUSDdaily12_02_13.gif

I'll wait now to see where this closes. If it closes below that trendline then I'll look to short it on a backtest at some point.

Very happy with this trade...

Over 300 pips banked, was also trading the swings.

My original entry was at 15650 and my exit was 15825.

Currently consolidating and I think this will head to the 200-day ma at 15879 early next week so I've gone long again at 15792, with tight stops at 15770..

Added to position on the dip at 15688

Really want to see this break above 15723 then 15770 and not to head back below the candle from 15670.

Stops in place, watching with fingers crossed.

Looks good for a bounce off the long term trendline to me?

Thanks Boss!

here you go mate

Can someone please post a daily chart of GBPUSD going back to 20 Dec 2012? I just want to check some price points.

Thanks in advance.

Basementgeek wrote:
Nice, 15769 hit

That trend-line move played out perfectly... Nice one longterm_view!!

Hopefully this move has some legs and will now extend to the 15900 area..

I am long as it seems to have found some support - especially as it is close to the weekly trendline. Stops at 1.5620