Over last few days the British Pound enjoyed a nice rally. Hard to say at the moment if this will last, but the moves were fairly large and directional and created decent opportunities. From the fundamental angle, appreciation of GBP came as a surprise. After all, the currency seems to be on everybody’s s**t list and is rumored to be the next victim in widening sovereign debt crisis. That could be true, eventually, but for now the Pound has been lifted by the minutes of the Bank of England’s monetary policy committee meeting.
Couple of things happened. One: the new British government announced larger spending cuts than expected, which should calm down budgetary fears. Of course the hard part will to actually stick to the plan. Two: the minutes revealed that one of the monetary policy committe members voted to increase the benchmark rate by 0.25%. Now, it doesn’t mean that we will see rate hiked very soon, but it was enough to provide a nice boost for the GBP.
Even before these two news were reflected in the price, charts were indicating increased likelihood for some GBP rally. Early this week I talked about possible trade in GBP-NZD using daily chart. Plan was to for a daily reversal candle around 2.0700-2.0800 level. One day later a doji like candlestick formed and the trade was on.
Entry was at 2.0807 . This move, if it indeed is a reversal, should take this cross above 2.1900. The 100 SMA at around 2.1400 is also very reasonable. However, the progress was nice here that when price moved above 2.1250, I decided to close it. Take of 450 pips in 3 days is good, it would be a shame to see it evaporate. So I took it. Besides, the Pound rally seemed to be overextended on short term bases. Exit happened near the high of the day, for a good trade.
Another of my GBP trades covered on these pages was also closed today. The EUR-GBP broke through the weekly resistance under 0.8400. That very long term chart suggests more down trend ahead, but one should be prepared to sit on it for weeks maybe months, and I’m not. As is, 185 pips profit in this cross is a very good score in my book, so the trade was closed at 0.8200 at the same time as the GBP-NZD position. I’ll look for more potential trades in these pairs on smaller time frames.
One trading day left in the week, so don’t want to look for large target trades. The Swissy is showing signs of cracking here and I like it in EUR-CHF pair. On the hourly chart, a possible reversal is forming, even if it proves to be only short lived. Buying at 1.3633, with objective at 1.3700 seems about right here. Also, breaks in Yen pairs under supports are short candidates.
Mike K.
Did you also do something in Ggb/Cad by any chance? It looks like the bullish move is over on 1H chart. What do you think?
Right now GBP-CAD seems to topping on this chart, so long positions could be closed.
Swiss Franc don’t want to turn up. Are you going to be selling them instead of buying? Thanks!
[...] the Euro weak and, evidently, heading lower still, the buy order in EUR-CHF has not been filled, same for USD-CHF from earlier in the week. I’ll keep an eye on all Swiss [...]
[...] the Euro weak and, evidently, heading lower still, the buy order in EUR-CHF has not been filled, same for USD-CHF from earlier in the week. I’ll keep an eye on all Swiss [...]
[...] the Euro weak and, evidently, heading lower still, the buy order in EUR-CHF has not been filled, same for USD-CHF from earlier in the week. I’ll keep an eye on all [...]
[...] The Swissy is showing signs of cracking here and I like it in EUR-CHF pair. On the hourly chart, a possible reversal is forming, even if it proves to be only short lived. Buying at 1.3633, with objective at 1.3700 seems about right here … View full post on EUR/CHF – Google Blog Search [...]
[...] Pound-Kiwi is one of the possibilities. This cross was discussed here not that long ago. Since then the GBP-NZD advanced from 2.0800 to 2.2100, before falling last week [...]
[...] Pound-Kiwi is one of the possibilities. This cross was discussed here not that long ago. Since then the GBP-NZD advanced from 2.0800 to 2.2100, before falling last week [...]
[...] Pound-Kiwi is one of the possibilities. This cross was discussed here not that long ago. Since then the GBP-NZD advanced from 2.0800 to 2.2100, [...]
[...] EUR-GBP is very close to 0.8315 support. My last trade in this pair worked out good, perhaps this one will, too. Sell order is placed at 0.8305, looking for a 100 pips [...]
[...] EUR-GBP is very close to 0.8315 support. My last trade in this pair worked out good, perhaps this one will, too. Sell order is placed at 0.8305, looking for a 100 pips [...]
[...] EUR-GBP is very close to 0.8315 support. My last trade in this pair worked out good, perhaps this one will, too. Sell order is placed at 0.8305, [...]