Thread: Discuss the GBP/USD with a DailyFX Analyst

Just got back - had a great weeks sailing. and the moves on cable made it even harder to come back

No change from my outlook last Friday - I'm still holding all shorts with a 1.5370 average.

As I also said last Friday this move down is a 3rd, the end of which is not due until next week, It looks like we are just in the process of putting in the 4th of that 3rd and then down some more for a couple of days to complete the final 5th of the 3rd . that ties in with my Delta ITD 11 being due Monday next week, - but should be a day or so later.

Bye.

FXCM would like to apologize for any difficulties you have experienced trading on May 6, 2010. In particular between 2:30 PM – 4:30 PM ET some clients may have experienced hanging orders or other difficulties.

The root causes of these issues were extraordinary market conditions. Unusual events occurred in all financial markets, including the US equity market. In a period of several minutes the Dow Jones Average dropped around 1,000 points and then rebounded several hundred points. The currency markets behaved equally chaotic. At the height of the market uncertainty, several banks stopped providing liquidity and stopped executing trades.

BELOW IS TIME TABLE OF TODAY’S EVENTS & ANALYSIS

FXCM did experience a few technical issues that were caused by the strain on the system that the lack of liquidity created. FXCM is going to be fully investigating the technical issues that occurred. FXCM’s order routing system currently reroutes client orders to actively quoting banks and there are measures underway to improve the order routing and order processing logic. We expect these further system improvements to be rolled out in the coming weeks.

Again, we would like to apologize for any problems that you may have experienced today. While FXCM cannot make any overriding statement on adjustments to positions that were negatively affected by today’s events, if you would like us to look into one or more of your trades, please submit an audit. To submit an audit please visit Audit Form and our audit committee will follow up with you as soon as possible.

May 6th Timeline & Analysis

First, institutions were very cautious due to the next day’s UK Elections, US Nonfarm Payrolls, and the Canadian unemployment rate announcement.

In addition to that we had several market moving events. These include:

7:45 ET – European Central Bank Interest Rate Decision

8:30 ET – Trichet speaks at ECB Monthly News Conference

14:46 – Dow dropped almost a thousand points and the bulk of the drop happened in less than an hour. The reason behind this drop was reported to be that Citi Bank’s trading desk accidentally sold 16 billion US Dollars worth of e-minis, when they were supposed to sell 16 Million.

After the big drop, two Fed officials came out with back to back announcements to help stabilize the market.

15:04 – Report that Fed’s Hoenig states that tomorrow’s jobs report will be positive

15:06 - Report that Fed’s Evans sees 3.5% economic growth in the US this year

Over the recent months, there has been a strong correlation between the US stock markets and the Japanese Yen. When the Dow plunged today, so did the Japanese Yen crosses. We saw JPY crosses drop between 350 (USD/JPY) and 1250 (GBP/JPY) points. We saw comparable volatility in non Yen crosses as well.

Market volatility and liquidity has returned to close to normal levels. However, there are still some major market moving events coming up tomorrow so manage your market exposure accordingly.

GBP/USD threatening to take out the former lows. See how this candle closes today.

well, I'm in the US, but I just read that the UK election was a real nail biter, Hung Parliament, first time in 36 years....any updates over the weekend you folks out in the UK, please post, Ill be checking.
Cable may have more down to go, as John G. projects, and he was on the money this week for sure!! Excellent job!

Can anyone recommend an FX RSS feed that is has been of value??

Originally Posted by KP FX Trader

well, I'm in the US, but I just read that the UK election was a real nail biter, Hung Parliament, first time in 36 years....any updates over the weekend you folks out in the UK, please post, Ill be checking.
Cable may have more down to go, as John G. projects, and he was on the money this week for sure!! Excellent job!

Can anyone recommend an FX RSS feed that is has been of value??

Yeah, GBP/USD sits right on the edge of the former lows. Good chance of it breaking.

I am in UK, currently 8.26pm.

Originally Posted by Sean Hyman

GBP/USD threatening to take out the former lows. See how this candle closes today.

Originally Posted by harveyd

I am in UK, currently 8.26pm.

4pm EST is when it closes today. So that's only 9 minutes away.

Originally Posted by Sean Hyman

GBP/USD threatening to take out the former lows. See how this candle closes today.

Hi Sean,

Candle closed above the lows.

Is the Friday a hammer candlestick?

Originally Posted by KP FX Trader

well, I'm in the US, but I just read that the UK election was a real nail biter, Hung Parliament, first time in 36 years....any updates over the weekend you folks out in the UK, please post, Ill be checking.
Cable may have more down to go, as John G. projects, and he was on the money this week for sure!! Excellent job!

Can anyone recommend an FX RSS feed that is has been of value??

Cameron (conservatives) and Clegg (liberal democrats) to hold talks over weekend in an attempt to get Brown out of Downing Street. They know they have to sort this out fast, foreign investors are watching these moves like hawks. UK situation critical.

Originally Posted by aykenar

Hi Sean,

Candle closed above the lows.

Is the Friday a hammer candlestick?

No, looks more like a doji to me. Closed right at the former lows...so no clear break just yet.

Originally Posted by Sean Hyman

No, looks more like a doji to me. Closed right at the former lows...so no clear break just yet.

hey Sean, I've never been up on the official names of the candles; I'm definatly seeing where a lot of traders were Caught off guard by the break of 1.4780. Weekly time frame was a pull back to people were shorting Started and then they started taking profit once it broke 4800; there were people bottom fishing after it broke it to. People buying between the .4700 and the .4450 area. Weekly shows a prior bounce @ 4400. Longer term support is @ 3650 and 3500. The next couple of weeks / months is really going to determine if the US$ gets Stronger or weaker. I'm waiting for a pull back on the 4hr time frame to possibly get short. Between 4700 & 5000 is where our battle is going to be at.

hi all!!With a great victory of all!9 may!!!

what about cable...i dunno....mb 1 wave down and up ?or now up and down trend over?we will see

Originally Posted by renkoMan

hi all!!With a great victory of all!9 may!!!

what about cable...i dunno....mb 1 wave down and up ?or now up and down trend over?we will see

This pair should range with in 1.4874 and 1.477 it is in the 5 wave of the EW headed to 1.4500 plus.

Originally Posted by Franosh

That's exactly how he and new Labour's spin doctors fed to people like you and the only thing that they succeeded is to dumb down a large proportion of the population to become suckers of their spin and would vote for them to keep on the feeding hands of the nanny state. You seem like a perfect example.

Brown is the arch architect of much of the mess in current British economy. This is not some irrelevant and innocuous spats on forums. You can learn more about the real truth about it by actually studying economics, finance and what actually happened, not just taking in the spin. (Before you want to flaunt whatever bits you know about business cycle, just for your information, I have a Ph.D. in economics and research on it.)

I've said in my last message that we should not continue this discussion here. So before Sean jumps in, we can just drop it here.

Couldn't have put it better Franosh.

My worry is, we're going to take about 10-years to sort this latest mess out. Almost the same result as over 30 years ago. We're probably going to see strikes again, etc, etc...

Interesting what is happening to the education system at present. My niece is an A-star student and only got accepted to two universities of her choice. Universities are prioritising overseas students, from what I hear, and very little places for domestic students. Hence, we're going to see the brightest and best in the UK get to university in the next couple of years. What will happen to the rest?

I didn't have a chance to trade on Friday. Perhaps just as well. Volatility was fantastic. I'm favouring a bit of a re-trace higher tomorrow, but ultimately, the outlook is down, down for the months ahead, imho.

Originally Posted by MoneyInc.

This pair should range with in 1.4874 and 1.477 it is in the 5 wave of the EW headed to 1.4500 plus.

70 pips so far. Eur gap almost 200 pips versus gbp 70 pips. Expect gbp to close its gap first, then possibly long again from both eur and gbp. Be careful

A-Yo Bro