Stuart Graham’s Post

#What to expect for the pound next week? https://ift.tt/ARizZQF ## The pound sterling can only rely on the US news background. The GBP/USD pair has been trading sideways for a long time, so it will require a very strong news background for the market to break out of this "mess." America will provide all the necessary data to increase market activity, but the strength of this data will determine whether we will see the long-awaited wave 3 or just sideways movement. Data on business activity indexes in the services, manufacturing, and construction sectors will be released in the UK. We don't expect such reports to wake the market from its slumber. Especially since these will not be the initial estimates of the March indexes, but the final ones, which rarely surprise market participants. I believe that the British news background will have no impact on the movement of the GBP/USD pair. We will discuss the American news feed in the corresponding review. In my opinion, what's extremely important for the pound right now is not just the news background, but rather the market sentiment. Over the past four months, there have been at least two Bank of England meetings, two Federal Reserve meetings, four sets of Nonfarm Payrolls reports, GDP, unemployment, and inflation data. As we can see, all these data points haven't ended the pair's sideways movement. The fifth set of reports also have a small chance of breaking the pound out of its horizontal movement. I also want to remind you that over the past four months, the likelihood of a Federal Reserve rate cut has significantly decreased. It's already clear that there won't be any monetary easing in March because the meeting has already taken place. Now the market is betting on June, but even the current level of US inflation puts this date in serious doubt. Consequently, the timing of the first Fed rate cut keeps getting pushed further out, and the number of expected rounds of cuts decreases. This whole process is referred to as the Fed maintaining its hawkish stance instead of being dovish and this should increase the demand for the dollar. This pattern works in the EUR/USD instrument, but not in the GBP/USD instrument. Therefore, regardless of the news background, it's crucial for the pound that the market stops ignoring the obvious factors. Wave analysis for EUR/USD: Based on the conducted analysis of EUR/USD, I conclude that a bearish wave set is being formed. Waves 2 or b and 2 in 3 or c are complete, so in the near future, I expect an impulsive downward wave 3 in 3 or c to form with a significant decline in the instrument. I am considering short positions with targets near the 1.0462 mark, which corresponds to 127.2% Fibonacci. Wave analysis for GBP/USD: The wave pattern of the GBP/USD instrument suggests a decline. I am considering selling the instrument with targets below the 1.2039 level, because I believe that wave 3 or c will start sooner or later. However, unless we can confirm ...

What to expect for the pound next week?: # The pound sterling can only rely on the US news background. The GBP/USD pair has been trading sideways for a long time, so it will require a very strong news background for the market to break out of this "mess." America will provide all the necessary data to increase market activity, but the strength of this data will determine whether we will see the long-awaited wave 3 or just sideways movement. Data on business activity indexes in the services, manufacturing, and construction sectors will be released in the UK. We don't expect such reports to wake the market from its slumber. Especially since these will not be the initial estimates of the March indexes, but the final ones, which rarely surprise market participants. I believe that the British news background will have no impact on the movement of the GBP/USD pair. We will discuss the American news feed in the corresponding review. In my opinion, what's extremely important for the pound right now is not just the news background, but rather the market sentiment. Over the past four months, there have been at least two Bank of England meetings, two Federal Reserve meetings, four sets of Nonfarm Payrolls reports, GDP, unemployment, and inflation data. As we can see, all these data points haven't ended the pair's sideways movement. The fifth set of reports also have a small chance of breaking the pound out of its horizontal movement. I also want to remind you that over the past four months, the likelihood of a Federal Reserve rate cut has significantly decreased. It's already clear that there won't be any monetary easing in March because the meeting has already taken place. Now the market is betting on June, but even the current level of US inflation puts this date in serious doubt. Consequently, the timing of the first Fed rate cut keeps getting pushed further out, and the number of expected rounds of cuts decreases. This whole process is referred to as the Fed maintaining its hawkish stance instead of being dovish and this should increase the demand for the dollar. This pattern works in the EUR/USD instrument, but not in the GBP/USD instrument. Therefore, regardless of the news background, it's crucial for the pound that the market stops ignoring the obvious factors. Wave analysis for EUR/USD: Based on the conducted analysis of EUR/USD, I conclude that a bearish wave set is being formed. Waves 2 or b and 2 in 3 or c are complete, so in the near future, I expect an impulsive downward wave 3 in 3 or c to form with a significant decline in the instrument. I am considering short positions with targets near the 1.0462 mark, which corresponds to 127.2% Fibonacci. Wave analysis for GBP/USD: The wave pattern of the GBP/USD instrument suggests a decline. I am considering selling the instrument with targets below the 1.2039 level, because I believe that wave 3 or c will start sooner…

What to expect for the pound next week?: The pound sterling can only rely on the US news background. The GBP/USD pair has been trading sideways for a long time, so it will require a very strong news background for the market to break out of this "mess." America will provide all the necessary data to increase market activity, but the strength of this data will determine whether we will see the long-awaited wave 3 or just sideways movement. Data on business activity indexes in the services, manufacturing, and construction sectors will be released in the UK. We don't expect such reports to wake the market from its slumber. Especially since these will not be the initial estimates of the March indexes, but the final ones, which rarely surprise market participants. I believe that the British news background will have no impact on the movement of the GBP/USD pair. We will discuss the American news feed in the corresponding review. In my opinion, what's extremely important for the pound right now is not just the news background, but rather the market sentiment. Over the past four months, there have been at least two Bank of England meetings, two Federal Reserve meetings, four sets of Nonfarm Payrolls reports, GDP, unemployment, and inflation data. As we can see, all these data points haven't ended the pair's sideways movement. The fifth set of reports also have a small chance of breaking the pound out of its horizontal movement. I also want to remind you that over the past four months, the likelihood of a Federal Reserve rate cut has significantly decreased. It's already clear that there won't be any monetary easing in March because the meeting has already taken place. Now the market is betting on June, but even the current level of US inflation puts this date in serious doubt. Consequently, the timing of the first Fed rate cut keeps getting pushed further out, and the number of expected rounds of cuts decreases. This whole process is referred to as the Fed maintaining its hawkish stance instead of being dovish and this should increase the demand for the dollar. This pattern works in the EUR/USD instrument, but not in the GBP/USD instrument. Therefore, regardless of the news background, it's crucial for the pound that the market stops ignoring the obvious factors. Wave analysis for EUR/USD: Based on the conducted analysis of EUR/USD, I conclude that a bearish wave set is being formed. Waves 2 or b and 2 in 3 or c are complete, so in the near future, I expect an impulsive downward wave 3 in 3 or c to form with a significant decline in the instrument. I am considering short positions with targets near the 1.0462 mark, which corresponds to 127.2% Fibonacci. Wave analysis for GBP/USD: The wave pattern of the GBP/USD instrument suggests a decline. I am considering selling the instrument with targets below the 1.2039 level, because I believe that wave 3 or c will start…

#Overview of the GBP/USD Pair for December 4; The Fed Might Finish Off the Pound Sterling https://ift.tt/8i7FWQX ## On Tuesday, the GBP/USD pair did not show dramatic movements, but the most notable point is that it hardly rises. We observed a slight correction after two months of decline in the British currency, but the entire drop doesn't even fit on the chart, while the correction is minimal. This suggests that the market has no intention of staying in a corrective phase for long. If the U.S. macroeconomic backdrop this week turns out strong, the pound could collapse again, as it remains overbought and unjustifiably expensive—just like the euro, a point we've been making since early 2024. An additional factor supporting the dollar could be the Federal Reserve. Recall that the market has priced in the entire or nearly the whole easing cycle over the past two years as U.S. inflation slowed. It must begin pricing in the Bank of England's monetary policy easing, which has barely started. This leaves us with the following: The pound sterling is overvalued, and the market has yet to factor in rate cuts in the UK. The Bank of England has not yet meaningfully started lowering rates. From our perspective, the pound will only continue to decline. Not only has the market already priced in the entire easing cycle, but it now appears that the Fed might lower rates far less aggressively than previously expected. The Fed is wary of Donald Trump, who is already promising to impose tariffs on any country he sees on the world map. This would likely result in retaliatory tariffs against the U.S., as no country will quietly endure such actions. Consequently, U.S. prices would also rise, triggering renewed inflation. The Fed would then have to either lower rates less aggressively or raise them again to combat high inflation. However, the market has already factored in the "Joe Biden scenario," where no new tariffs are introduced, and everything remains calm and stable. The longer this situation persists, the stronger the case for further dollar growth. The Bank of England, meanwhile, is only providing temporary support to the pound. It's worth remembering that the Bank's current indecision will eventually lead to aggressive easing. The BoE fears inflation for different reasons, and once it takes more active measures, the pound could start falling much faster. Alternatively, the BoE might adopt a prolonged rate-cutting approach, resulting in a slower but extended decline for the pound. The pound will continue moving south no matter how you look at it. The 16-year downward trend remains intact, and there are still no solid grounds to expect significant growth in the British currency. The average volatility of the GBP/USD pair over the last five trading days is 87 pips, considered "average" for the pair. On Wednesday, December 4, we expect movement within the range defined by 1.2607 and 1.2781. The higher linear regression channel is pointing downward,...

#Overview of GBP/USD on September 17; Why Correct When You Don't Have To? https://ift.tt/6W854qc ## The GBP/USD pair also surged on Monday. While the euro might have appreciated based on market expectations surrounding the Federal Reserve's rate decision, the pound had even more reasons to rise. After all, the Bank of England's meeting is on Thursday, where it's unlikely that monetary policy will be eased. What better reason to buy the pound? Thus, the pound sterling is rising again, seemingly out of nowhere. We want to remind you that the market can price in global events and processes in advance. "Buy on rumors, sell on facts." However, the second part of this rule seems to have stopped working lately. For instance, the BoE started lowering rates, and what happened? The pound sterling kept rising. The Fed will begin easing on September 18—tomorrow, in fact. Does anyone really believe that the dollar will start a prolonged rally on September 19? We believe—or rather, we want to believe in this. Otherwise, the last remnants of logic will disappear. We'll be left with a scenario where the dollar falls under any circumstances, and the market invents new reasons to sell the US currency. For nine months straight, we've been listening to the "comedy" called the "American recession." The US economy posts stronger-than-expected growth every quarter, and this growth is measured in percentages, not tenths of a percent, like in Britain or the Eurozone. Yet somehow, everything is only bad in the US, while the "British and European economies are recovering." Last week, European Central Bank President Christine Lagarde stated that GDP forecasts had been revised downward (and they were already modest), but the euro continues to rise, as it has been. And along with it, so does the pound. Thus, it doesn't matter what decision the BoE makes or how many members of the monetary committee vote for a rate cut. So, the pound might fall locally by 50 pips—what difference will that make? Even traders who believe the current movement is justified can again see its illogical nature. It's Monday, no news, data, or reports—and the pound is rising by 100 pips in the first 12 hours. If we look at the illustration below, we can see that the pair doesn't always cover 100 pips in a day. In the last 30 days, it managed to show volatility above 100 pips only seven times. But, of course, the pound's growth is logical and natural. This is probably due to "rising risk sentiment." We expect only the end of this illogical rise because opening positions when you don't understand why the pair is moving in that direction is foolish. Of course, if any trader is trading based purely on technical analysis, then going long is precisely what's needed right now. By Friday, we will have a clearer understanding of what to expect from the US dollar. If it continues to fall as it did on Monday, expecting logic from the market now would be like expecting the Liechtenstein national...

#Outlook for GBP/USD on April 8. The pound feels great in a flat state https://ift.tt/TSWcrUP ## Analysis of GBP/USD 5M GBP/USD showed absolutely absurd movements on Friday. They were identical to those shown by the EUR/USD pair. Initially, on strong labor market and unemployment statistics from across the ocean, The dollar initially rose after strong U.S. labor market and unemployment data, but then it quickly returned to its original positions. All the movements on Friday and throughout the entire past week practically had no impact on the technical picture. The fact is that the pound has been in a flat state for the past 4 months. It is clearly visible on the 24-hour timeframe. Therefore, the price can move however it wants within this flat phase (approximately between the levels of 1.25 and 1.28). The Ichimoku indicator lines have no power. The price being above or below them does not indicate any trend. There are only two options left. Either wait for the flat to end or trade on the smallest timeframes. The first option is bad because no one knows how long one needs to wait. The flat phase has already lasted for 4 months, and it could last for another 4. The second option is bad because not only is it a flat, but a low-volatility flat. The pair typically moves by 50-60 pips per day, so it is very difficult to expect good profits a priori. And if we add the multiple signals that simply do not work properly due to low volatility, then it becomes quite sad and disheartening. But the most important thing is for traders to clearly understand what to expect from the pair at the moment. Understanding this will help avoid losses. The trading signals on Friday left much to be desired. Initially, the pair bounced off the level of 1.2620, then surpassed the area of 1.2605-1.2620, and then returned back above it. In all three cases, the price moved in the intended direction by 10-20 pips, no more. Thus, the first trade closed with a small profit because it should have been manually closed before the Nonfarm Payrolls report. The second signal was executed, but the trade closed at breakeven. The third signal should not have been executed anymore because the first two turned out to be a false signal. COT report: COT reports on the British pound show that the sentiment of commercial traders has frequently changed in recent months. The red and blue lines, which represent the net positions of commercial and non-commercial traders, constantly intersect and, in most cases, remain close to the zero mark. According to the latest report on the British pound, the non-commercial group opened 7,000 buy contracts and closed 1,100 short ones. As a result, the net position of non-commercial traders increased by 8,100 contracts in a week. The fundamental background still does not provide a basis for long-term purchases of the pound sterling, and the currency remains in a sideways channel. The non-commercial group currently has a total of 98,300 buy con...

GBP/USD is struggling to regain control of the $1.26 handle and its 100-week moving average, despite the US dollar’s softer start to the week. The UK-US yield spread remains largely unchanged with yields falling in both regions, whilst the risk-sensitive pound failed to capitalise on improving global sentiment evidenced by the rally in global stocks on Monday. The pound also lost its grip on €1.20 versus the euro, sliding around 0.5% on Monday – its worst day of the month. Money markets are still pricing in less than a 20% chance of Bank of England (BoE) rate cut in December and three cuts are fully priced in by the end of 2025. The recent uplift in inflation alongside the announced fiscal expansion implies a slower cutting cycle by the BoE, at least initially. However, stagflation fears are on the up, limiting sterling’s gains from this hawkish outlook. Looking ahead, the UK is likely less exposed to direct tariff risks given its trade deficit in goods with the US, which we think supports the case for sustained UK economic outperformance versus an already ailing Eurozone – allowing GBP/EUR to remain in an upward trajectory. Against the dollar though, despite weak seasonal trends for the buck and month-end flows pointing towards USD selling this week, the downtrend remains intact so long as GBP/USD stays below $1.28 and its 200-day and 200-week moving averages (located around the same level). #currencyrisk #GBPUSD #FXHedging

Market Snapshot: Stability Amid Uncertainty Over the past 24 hours, the Pound Sterling (GBP) has shown resilience against the US Dollar (USD). Fed Chair Jerome Powell's cautious remarks on the US labour market have stirred speculation about potential rate cuts in September, even though he did not provide a specific path for these cuts. Despite these uncertainties, the GBP/USD pair remains strong, holding steady around 1.2800 after peaking at 1.2850 recently. Pound Sterling's Performance and Projections Political stability in the UK, coupled with ongoing debates around the Bank of England's (BoE) rate policy, has bolstered the Pound. Some BoE policymakers, like Jonathan Haskel, argue for maintaining current rates due to persistent inflation, but market expectations suggest potential rate cuts in the near future. Keep an eye on the upcoming UK GDP and factory data for May, which are expected to show modest economic growth and could influence these expectations. Looking Ahead: Economic Indicators and Rate Decisions As we move through the remainder of the year, the Pound's performance will hinge on key economic indicators and BoE's monetary policy decisions. Today's comments from BoE's chief economist Huw Pill will be crucial in setting the stage for the August 1 interest rate decision. Should the BoE signal a rate cut, we may see some depreciation in the Pound, aligning with analysts' views that the GBP might be overvalued. Conclusion: Navigating the Financial Landscape In conclusion, while the Pound Sterling maintains its strength for now, its future trajectory will be shaped by upcoming data releases and central bank communications. At #AlpineFX, we are committed to keeping you informed and helping you navigate these market dynamics. Stay tuned for further updates and feel free to reach out to us for personalised insights and strategies tailored to your financial needs whether you are a business and/or individual.

#Outlook for GBP/USD on April 16. Pound awaits inflation data https://ift.tt/zxSckHe ## Analysis of GBP/USD 5M GBP/USD tried to start a bullish correction, but it was a minor movement. It seems strange to talk about the pound failing to show growth. Over the past 6-8 months, the British pound has been rising left and right. However, the 4-month flat has finally ended, and now the pair is particularly heading downwards. On Monday, the US released a retail sales report, which significantly exceeded expectations. This was another US report that turned out to be stronger than the market expected, demonstrating the strength of the American economy, despite the high rates of the Federal Reserve. The pair has not yet managed to break through the 1.2429-1.2445 range, but it seems to be only a matter of time. So far, the market has only taken the first step towards a new downtrend, which by all estimates should be strong and long-lasting. The pound has just settled below the 1.2516 level, which can be considered the boundary of the sideways channel on the 24-hour timeframe. It is important that the market does not receive any factors supporting the British currency in the near future, as bulls could quickly return to the market and disrupt the entire technical picture with illogical purchases once again. This week, there are events that could support both the dollar and the pound. The key event is the UK inflation report. The stronger the decline in inflation by the end of March, the higher the likelihood of seeing a new, predictable decline in the British currency. In this case, British inflation may "overtake" US inflation, and the Bank of England could surpass the Fed in starting the rate cut cycle. Two trading signals were formed on Monday. In both cases, the price bounced off the 1.2445 level. The first buy signal was formed overnight, but at the opening of the European trading session, the price remained near the point where a signal is formed. Therefore, traders could open a long position. The price did not reach the target level of 1.2512, and during the US trading session, the pair returned back to the 1.2445 level. The second buy signal was formed too late in time for traders to act on it. The first trade closed at breakeven with a Stop Loss. COT report: COT reports on the British pound show that the sentiment of commercial traders has frequently changed in recent months. The red and blue lines, which represent the net positions of commercial and non-commercial traders, constantly intersect and, in most cases, remain close to the zero mark. According to the latest report on the British pound, the non-commercial group closed 18,400 buy contracts and 3,200 short ones. As a result, the net position of non-commercial traders decreased by 15,200 contracts in a week. The fundamental background still does not provide a basis for long-term purchases of the pound sterling, and the currency finally has a real chance to end the flat period...

#Overview of the GBP/USD Pair for December 6: The Pound Rose Without Even Knowing Why After Powell and Bailey's Speeches https://ift.tt/k9JBWxA ## The GBP/USD currency pair exhibited sluggish movement on Thursday. While no significant events were scheduled in the UK or the US that day, Wednesday was packed with notable occurrences. Bank of England Governor Andrew Bailey and Federal Reserve Chair Jerome Powell gave speeches. Although neither made groundbreaking announcements, Bailey did mention the possibility of the BoE lowering its key rate four times by 0.25% each in the coming year. Conversely, Powell noted that the Fed has the flexibility to take its time with monetary policy easing. At first glance, these statements offered no new information to the market. Still, even such well-known facts should have logically triggered a new rise in the US dollar. Throughout 2024, the market has anticipated monetary policy easing by the Fed—ideally at every meeting and preferably by 0.5%. With only one meeting left this year, the market remains optimistic about significant easing in December. This is despite Powell and several other Fed officials almost explicitly stating that there is no urgency to lower the key rate quickly. The market's expectations continue to price in more aggressive easing than is likely to materialize. Thus, we maintain that the dollar remains undervalued and oversold, even after a two-month decline. Meanwhile, Bailey signaled that a rate cut in December is unlikely—a point the market appears to trust. Given that UK inflation is rising again (as it is in the US), the BoE will likely cautiously cut rates. The BoE has already been slower than the Fed, especially the ECB, in easing monetary policy. This cautious stance is the primary reason the pound falls less sharply than the euro and rises more robustly. However, this advantage may not be enough to support the pound in the medium term. The BoE will inevitably lower rates as it faces significant economic growth challenges like those in the EU. The UK economy isn't likely to grow spontaneously—it needs stimulation and favorable conditions, which are currently lacking. High rates and visible economic struggles—exacerbated since Brexit—continue to weigh on growth prospects. From a technical perspective, the daily chart shows that the price has corrected to the Kijun-sen line of the Ichimoku indicator (default settings). A rebound from this line is likely. Today, crucial reports on unemployment and the labor market will be released in the US, potentially leading to further dollar weakness. However, even if the GBP/USD pair rises today, it will not alter our long-term outlook. The average volatility of the GBP/USD pair over the last five trading days is 85 pips, categorized as "medium." On Friday, December 6, we expect the pair to move from 1.2664 to 1.2834. The higher linear regression channel is directed downward, indicating a bearish trend. The CCI indicator has...