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by Ashraf Laidi
Posted: Nov 25, 2008 15:00
Comments: 19
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This thread was started in response to the Article:

Fed's Quantitative Easing Extends Seasonal Reversals

As the Fed's quantitative easing policy reaches a new landmark, markets are set to make their seasonal reversal, typical of the last 5-6 weeks of the calendar year.
 
 
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Posted Anonymously
16 years ago
Nov 26, 2008 16:15
thanks ashraf but dont u think that we ay see some retracement to 1.4500 or 1.4800 before the up move ?
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 26, 2008 16:04
Hi Nour, GBPUSD uptrend is already established for now ie until mid Dec at least. Note the higher lows and higher highs are telling you this in the chart. A continuation of this trend can take us to as hgh as $1.58. Key resistance remains at $1.62, which I mentioned as a target for year end max a few weeks ago in this Comment section.

Ashraf
Nour
Amman, Jordan
Posted Anonymously
16 years ago
Nov 26, 2008 10:11
Hello ashraf hope that u are doing well,

please can u just give us some resistance and support on GBPUSD and whats the expected targets from now till the end of month and year plz

and what is the key level if the pair break it will change the view to up trend

Best Wishes
Nour
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 26, 2008 0:05
Simon, sounds good. Your argument based on fundamentals is well taken, but fundamentals do not always drive the flows, especially during the last 5-6 weeks of the year. Best of luck
Ashraf
Simon
Harrogate, UK
Posted Anonymously
16 years ago
Nov 25, 2008 19:29
Hi Ashraf,

I closed my GBP/USD & GBP/EURO trade today. I'm surpirsed the UK Budget report did not scare the markets as the outlook is dire. I'll go with you seasonal theory. Maybe after Xmas when the economic data is bleak it will be time to short GBP.

All the best SIMON
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 25, 2008 18:05
Hamish, if you're looking for more volatility in yen crosses, sure, you can try AUDJPY and NZDJPY. GBPJPY will also keep you awake. Also consider playing cable between 1.5360 and 1.5300.
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Nov 25, 2008 18:02
Luca,

Great questions. The extent to which gold will recover and yen weakens may vary. So for instance, there's a strong possibility that the incoming gold rally will be greater than the resulting yen decline (as is the case these past 2 days).

I do not recommend to time the market as far as gold is concerned. I remain a secular bull in gold (for the long term). As for USDJPY, I don't expect a bottom until Q4 2009, early 2010, so we could well see 85-87 in USDJPY.

Also, one scenario where both GOLD and JPY will rise is in the event that a new systemic risk originates wholly from the US, such as renewed troubles with Citi or a GM bankruptcy.
hamish
Canada
Posted Anonymously
16 years ago
Nov 25, 2008 17:36
If yen USDJPY movements are modest, where does the volatile AUDJPY fit in the scheme of things? Would AUDUSD be the better trade?
Luca
Lausanne, Switzerland
Posted Anonymously
16 years ago
Nov 25, 2008 16:03
Hi Ashraf. Good points as usual. What I am still struggling to reconcile is - if the broad trend over the next few months is "more of the same" in terms of weak credit and equity markets and the current phase of renewed risk appetite is mostly a short-term trend, the JPY should sooner or later reassert itself and squeeze once again risky assets, commodities and gold included. At what point does gold decouple and start appreciating again vs. $ and EUR despite the strong JPY? I mean, is there a scenario where JPY AND Gold appreciate together over the next few months? Many thanks in advance. By all means, please let me know if you happen to be in the Continent.
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