Cable - where's it going next?

As the MD of an algo firm that trades GBP/USD and also GBP/JPY I though I would open up this thread to get a discussion going on Sterling to see if any agreed consensus on the near and medium term future can be derived...

Today the shadow of Greece and the resulting uncertainty hangs over the Euro market and that will have its potential effect on GBP as well... The possible referendum and the possible default in the meantime are all adding to an already uncertain situation.

Without further updates over the weekend it looks like a weak open for GBP/USD on Monday
Not much in the way of market data on Monday morning either to deflect the cable bears.

So its a watch this space over the weekend to see what if anything materialises...



Sean

Agreed. i think short term it will go up - economic growth is better than expected and data in general is coming through positive. That and the 'Rate Hike' phrase being thrown around by some BoE players - Fundamentally its a Bullish currency... the question is for how long...

Outside of the Greek issue - then Sterling is better placed to rise against most currencies - an early interest rate rise in the US could scupper that and at the minute it does look like the US hawks will act first - but against the Euro, GBP risk to the downside is limited.

Sean

Well a bit of weakness today for Cable after the Greek default - but no great panic - looks like we will see a softish range trade with the bias to the downside for the rest of the week unless there are ant news or data surprises.

Sean

A quickly reversed small spike up this morning on the release of the services PMI to 1.5645 but then back to the 1.5620 area where the Pair has been more or less stuck - so pretty lifeless and with the US closed today - this is going to be a quiet afternoon - The Greek referendum result will be the next catalyst for a move - and who knows where that will take us :)

Sean

The Pound versus the Dollar keeps oscillating around the 1.5500 level. From that point the price may go in any direction, but the bearish momentum seems to be in place.

you guys need to wait for further confirmation GBP CPI today and a speech from Carney later this session. The GBP doesn't really have much effect from Greece at all. What effects is USD and JPY as they are risk averse sensitive.

Not so much volatility in the cable today.

No it's holding its own with the USD's rise
BoE chair's comments yesterday - he has a lot more presence than Yellen :)

Bit more volatility in GBPJPY

But by nd of day probably no real movement across GBP in general


Sean

Cable has been very volatile, Carney is talking about a possible rate hike by the end of the year, but fundamentals dont support that notion.

I expect GBPUSD moving down to 1.518 over the next week or two based on recent economic data and volume. I currently have a short trade at 1.55962 based on this. Unless something big happens with the economic data.

Of course Cable can rise on a weaker USD as well..
Carney has a much more believable presence then Yellen...

Fundamentals are mixed - but with inflation running low and reasonable employment - the economy could stand 0.25% increase
Of course they always caveat the remarks - so no one is really committing to anything - just yet.

Sean

I'm not optimistic about the GBP this week..

Closed out my GBPUSD short trade for small profit. Seems to be hitting major support now.

i guess it's make it or break it now.

Yes it's now at an interesting point - technically you can see a sort of head and shoulders forming which doesn't bid too well - but reverting to fundamentals it should find support on recent comments so I doubt the downside will be to severe and we may see another upward movement from here... but it's too early in the Asian session to make a call - Mondays in Asia are no indication for Cable really - take a quick momentum based profit of a few pips if you get the chance - that about it till Europe opens

Sean

The cable is an interesting one

Base fundamentals are strong for both the GBP and the USD so I wouldn't trade the pair...

...instead id be looking to buy into the GBPAUD if we get some good GDP readings tomorrow... i.e. if they are good figures then the GBP should move more against the AUD than it will the USD, - simply because the AUD is weak, whereas the USD, being fundamentally strong could stand up to the GBP more.

Thats my 2 cents anyway :)

Have a great week all.

Since both the Bank of England and the FED are thinking about raising interest rates, it is hard to predict a clear direction on the GBPUSD. The oscillation continues around the 1.5500 level.

I believe GBP/USD follows EUR/USD path, at least on small time frames