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This thread was started in response to the Analytic:
GBP Trade Index 18-Year Chart
Daily GBP (British Pound) chart of 18 years of cyclical developments in finance & politics
Once it drops Chloe, it's going to be a very long and fairly fast fall (relatively speaking)...it's going to fall some 600-700 pips. I see 1.5700 in scope.
If, and this if a big if, eur/gbp has been sold off (200 pips since monday is HUGE) based on this Merkle resignation rumor, then eur/gbp is an interesting long here, and either way, gbp/usd will reverse when this run exhausts itself.
1.6260 is first stop. Accelerates down after that.
Just look at FV. If any pair "deserves to rise against usd, it is aussie. And Aussie is down 50 pips from its big news just 24 hours agao. And the pounder is up 200 plus pips in 48 hours based on what? It's recent cure of cancer and solving of the economic crisis?
BTW, hoping usd/cad can absorb the offers and congestion and plow it's way through the 1.03 figure and perhaps accelerate on the bid.
Another one ro look at, for "real" usd strength, is usd/chf. Since chf is generally regarded as a "solid" currency within the real world, and not latent with so many of those issues facing the U.S. and eurozone, appreciation of usd vs chf is evidence of real usd buying, and a precursor to that dollar index rally Ashraf is depicting.
It appears the mafiosa whom The Pounder hired to pimp it's pair higher and higher when every other pair vs usd is declining is running out of steam to drive eur/gbp lower.
Short gbp/usd at 1.6350. t will get decimated in either the european session or U.S. session
This "pattern" appeared Monday in Asia out of the blue, and is the sole reason why cable has become the darling of fx. On Monday, cable started a steady grind higher with literally zero back-and-filling. Eur/gbp cross was 0.9015 at that time. Just a few days later it sits at 0.8873.
Interesting, at current euro value of 1.4500, had eur/gbp dropped 55 pips to 0.8950 instead of all the way down to 0.8873 where it is right now, cable's value would be 1.6200, over 100 pips lower than where it is at the moment.
Watch out for the Euro/GBP cross if it breaks 0.8855 then there will be a big break out in the GBP/USD we could see 1.6470
My advice to put stop loss above 1.6350 which represent 50 % fib from the 17th of November height.
Dima
cable up 15 pipis, euro down 3.
The manipulators are back in force.
Mighty bullish, eh?