An understated problem for GBP/USD?

HI,

As inflation is expected to fall in the UK in 2012 and 2013, the "real" affect of the government deficit will become more cumbersome and lead to the deficit actually increasing at a faster "real" rate...

In short, the next two years for GBP/USD could be an epic short assuming continued euro zone crisis, bank stress, further BOE asset purchases, 0.5% rate, strengthening US economy...

I look forward to discussing others' views on cable trading.

S.

Your fundamental analysis could well prove to be right. One thing is for sure and that is that even in a bearish market there can be prolonged bullish corrections, (and vice versa) shaking out thye weaker players, so any position taken on this fundamental analysis may be better done so by selling at a High, unless you have a very large stop.

There are so many variables to consider and with sentiment seemingly changing from the so called risk on to risk off in the blink of an eye, anything can happen.

Personally I prefer the technical approach and by doing so I don't have to ' take a view ' particularly not one 2 years out, I just play my edge. Some will doubtless look to time entries into a such a fundamental view technically, by selling the rallys, whereas on the smaller t/f's one is able to take advantage of some of those rallys as well as the general/trend direction- assuming of course your fundamental analysis/view plays out.

From a technical persepective and see-ing as you are talking longer term I'll look at the weekly chart...a break lower this week saw a LL just below the last significant LL of 5270 on this t/f but price closed bullishly on the 4hr and below on Friday having bounced off the 5234 weekly Lo. This weekly t/f is showing some bearish signs therefore but probably still looks a little mixed at the moment, admittedly though more bearish leaning than bullish ?



G/L

mightymayesy said:

HI,

As inflation is expected to fall in the UK in 2012 and 2013, the "real" affect of the government deficit will become more cumbersome and lead to the deficit actually increasing at a faster "real" rate...

In short, the next two years for GBP/USD could be an epic short assuming continued euro zone crisis, bank stress, further BOE asset purchases, 0.5% rate, strengthening US economy...

I look forward to discussing others' views on cable trading.

S.

Click to expand...

bbmac said:

Your fundamental analysis could well prove to be right. One thing is for sure and that is that even in a bearish market there can be prolonged bullish corrections, (and vice versa) shaking out thye weaker players, so any position taken on this fundamental analysis may be better done so by selling at a High, unless you have a very large stop.

There are so many variables to consider and with sentiment seemingly changing from the so called risk on to risk off in the blink of an eye, anything can happen.

Personally I prefer the technical approach and by doing so I don't have to ' take a view ' particularly not one 2 years out, I just play my edge. Some will doubtless look to time entries into a such a fundamental view technically, by selling the rallys, whereas on the smaller t/f's one is able to take advantage of some of those rallys as well as the general/trend direction- assuming of course your fundamental analysis/view plays out.

From a technical persepective and see-ing as you are talking longer term I'll look at the weekly chart...a break lower this week saw a LL just below the last significant LL of 5270 on this t/f but price closed bullishly on the 4hr and below on Friday having bounced off the 5234 weekly Lo. This weekly t/f is showing some bearish signs therefore but probably still looks a little mixed at the moment, admittedly though more bearish leaning than bullish ?


G/L

Click to expand...

bbmac

I don't trade forex as you know, but this chart looked intriguing so I thought I'd mark it up with the 3+ bar swings to see what it looked like from that perspective.

1. The swing trend changed to up - when the earlier swing high in the downtrend was breached (swing high/ low bars are the left edge of the rectangles)

2.Nice long trade (from break of swing low bar high) after the first swing low in the new uptrend.

3. A losing long trade here.

4 & 5. Another two nice long trades

6. Swing trend change to down.

7. Nice short trade from first swing high in the new downtrend.

8. And another which you'd still be in.

Away, Satan - no tempting me away from my equities

jon

ps: might have missed another potential loser between 5 and 6 depending where you put your entry

mightymayesy said:

HI,

As inflation is expected to fall in the UK in 2012 and 2013,

In short, the next two years for GBP/USD could be

S.

Click to expand...

"expected to fall" and "could be"

What does the technician do?

Price is going down on Daily. A trend has developed. To the downside. Stay SHORT.

deadbroke said:

"expected to fall" and "could be"

-------------------------------------

What does the technician do?

Price is going down on Daily. A trend has developed. To the downside. Stay SHORT.

Click to expand...

And then while SHORT just simply recognize that a big support is at hand on WEEKLY and be alert for a possible bend in the trend or continuation down in accordance with the rules of trend, the trend tends to continue, the trend can reverse at any instant without notice.

I am a huge huge fan of technical analysis, however, in isolation, I think it limits potential performance.

I would GUESS that most reasoned and seasoned traders (which I am not!) take a balanced view of technical and fundamental and appreciate both in equal measure.

After all the market is independent and has no many whilst technical analysis is a self fulfilling prophecy. Antithesis alert!

My technical analysis tells me to wait on GBP/USD... but where is the fun in that?

S.

mightymayesy said:

I
My technical analysis tells me to wait on GBP/USD... but where is the fun in that?
S.

Click to expand...

not only it isn't fun but you're also not making money, if it goes down what's wrong with shorting it?

BILLV said:

not only it isn't fun but you're also not making money, if it goes down what's wrong with shorting it?

Click to expand...

Exactly... oh wait a minute, that would be predicting the future...

Sense the tone... I am waiting for the trade to set up an pick my entry.

S.

mightymayesy said:

I would GUESS that most reasoned and seasoned traders (which I am not!) take a balanced view of technical and fundamental and appreciate both in equal measure.

S.

Click to expand...

Ditto for bisexuals - I've yet to meet a happy one.

: )

s.

mightymayesy said:

Exactly... oh wait a minute, that would be predicting the future...

Sense the tone... I am waiting for the trade to set up an pick my entry.

S.

Click to expand...

Yeah, if she said, "mount me now" you'd still be waiting for the setup.