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VIX, Oil, BRICS & Sterling's Sell-Appeal
BRICS equity indices fail at key fib retracements, VIX and oil near major trend lines and sterling's sell-appeal hasn't looked this good in a while.
we have probably seen cable's 2009 highs and we're on a gradual pulldown.
if you read carefully, I never said it'll take 49 days for it to test 1.6125.
But IMO it'll start climbing towards the 1.70 level again by 50th day or it may've crossed it already by a small margin.
pretty much like a human's sleeping cycle, you can never tell if you'll be deepest in your sleep at midpoint of the night, it could be as soon as you hit the bed, after a couple of hours or early in the morning.
so in this fall from 1.70, it can hit 1.6125 within 10 days or 25 days or 40 days... who knows?
but from there on we'll gradually wake up.... start rising.... coming to life again :)
Ravi
if 95% of the market feels the dollar is doomed that leaves very little upside potential as it means that only a few more people can switch positions and make it go higher. Therefore there is far greater scope for the dollar to go UP than DOWN.
Sterlings downtrend has already started against SFR, EURO and Dollar. I can easily see the pound to retest 2009 lows against sterling for the reasons i have suggested.
raulin, the recent fundamental numbers on the economy do not support the rally in oil. it's ALL ABOUT SUPPLY. Oil is up on those inventory numbers (caused by weaker US imports). So we shall see.
rpats, very interesting. so you suggest sterling to FLY from 1.6125 on day 49 to 1.70 on day 50?? over 800 pips on 1 day??
spec, still more downside for GBP.
trader, thanks for your contribution.
Ashraf
I don't agree with you there, If BoE wanted to maintain trade deficit levels from when sterling was 1.35, they would've put the brakes on before it reaches 1.70.
I am sure BoE want to keep sterling value high with these spikes in oil and commodities.
It all comes down to affordability and price parity mate.
Also I can't help chuckling at your comment on sterling not a safe currency - what makes you think dollar's safer then sterling?
unless you had tea with Mr. King this morning your statement on what BoE is trying to do is very strong :)
Thanks for you perspective, but on this one... I'll stick to mine.
Ravi
My first comment, but please excuse my contradictory view on Cable.
Have you heard of an ant or a spider... it does fall but keeps trying everytime 'cos it has a goal in mind, when it reaches first goal it rests for a bit, then starts climbing again....
higher the magnitude of the climb and the faster it climbs the more it rests.
In psychology we learn that a human brain needs to rest atleast 25% of any give time.
so going by this principal, the journey from 1.35 to 1.70(25.92%) took 196 days.
so cable may rest for another 49 days and consolidate upto 1.6125.
but on the 50th day it'll be very close to 1.70 and may have crossed this level already.
Please excuse my ignorance over technical numbers and levels etc. but these are my views and i am purely going by human physics and psychology after all humans made this market.
Ravi