Tag: GBP

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Why BREXIT matters

From The Guardian, June 14th:

Support for leaving the EU is strengthening, with phone and online surveys reporting a six-point lead, according to a pair of Guardian/ICM polls.

Leave now enjoys a 53%-47% advantage once “don’t knows” are excluded, according to research conducted over the weekend, compared with a 52%-48% split reported by ICM a fortnight ago.

….Prof John Curtice of Strathclyde University, who analyses available referendum polling data on his website whatukthinks.org, noted that after the ICM data, the running average “poll of polls” would stand at 52% for leave and 48% for remain, the first time leave has been in such a strong position.

If the UK votes to LEAVE, we can expect:

  • A sell-off of UK equities. GDP is expected to contract between 1% and 2%. A Footsie breach of support at 6000 would signal a test of 5500, while breach of 5500 would offer a target of 5000 (5500 – [ 6000 – 5500 ]).

FTSE 100

  • UK housing prices fall.
  • A sharp sell-off in UK banks in response to falling GDP, equities and housing — threatening contagion in financial markets.
  • BOE rate cuts to support the UK economy.
  • A sharp fall in the Pound due to uncertainty, lower interest rates and lower capital inflows.

GBPUSD

  • The Euro falls in sympathy, as confidence in the EU dwindles.
  • The US Dollar strengthens, causing the Fed to back off on further interest rate rises.
  • Volatility surges across all markets.
  • Gold spikes upward.

Hat tip to The Coppo Report

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Forex: Euro, Pound Sterling, Yen, Aussie, Loonie, Rand

The euro is testing resistance at $1.23/$1.24 against the greenback. Breakout above resistance and the descending trendline would warn that the primary down-trend is weakening and a bottom is forming . Negative values on 63 -day Twiggs Momentum continue to indicate a primary down-trend and respect of resistance would favor another decline.

Index

* Target calculation: 1.205 – ( 1.240 – 1.205) = 1.170

Pound Sterling is retracing to find support against the euro. Friday’s doji signals uncertainty. Respect of €1.27 would mean that the up-trend is still accelerating, while respect of €1.255 would indicate a healthy trend.

Index

* Target calculation: 1.26 + ( 1.26 – 1.23 ) = 1.29

Canada’s Loonie is strengthening against the greenback on the weekly chart.  Breakout above parity would confirm a test of $1.02*. Fluctuation of 63 -day Twiggs Momentum around zero, between 3% and -3%, would indicate a ranging market.

Index

The Aussie dollar is testing resistance at $1.045/$1.05 against the greenback. Breakout would offer an initial target of $1.08*. Recovery of 63 -day Twiggs Momentum above zero suggests a primary up-trend.

Index

* Target calculation: 1.05 + ( 1.05 – 1.02 ) = 1.08

The Aussie is also testing resistance at 82/82.50 Japanese yen. Breakout would offer an initial target of 84.50* and a medium-term target of ¥88.

Index

* Target calculation: 82 + ( 82 – 79.50 ) = 84.50

Against the South African Rand, the Aussie is retracing to test support at R8.50. Respect would offer an initial target of R9.00*. Rising 63 -day Twiggs Momentum continues to indicate a primary up-trend.

Index

* Target calculation: 8.75 + ( 8.75 – 8.50 ) = 9.00

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Forex: Euro, Pound Sterling, Yen and Rand

The euro broke medium-term resistance at $1.32, indicating a rally to test the descending trendline at $1.38*. Momentum is rising but the primary trend remains downward.

Index

* Target calculation: 1.32 + ( 1.32 – 1.26 ) = 1.38

Pound Sterling broke its descending trendline, but respect of the zero line by 63-day Twiggs Momentum suggests continuation of the primary down-trend. A fall below $1.565 (the last two weeks low) would warn of another test of primary support at $1.530. Recovery above $1.590 is less likely, but would indicate a rally to test $1.620.

Index

The greenback broke through resistance at ¥80 and is now retracing to test its new support level. Respect would confirm a primary up-trend, signaled by the long-term bullish divergence on 63-day Twiggs Momentum (and its recovery above zero).

Index

* Target calculation: 80 + ( 80 – 75 ) = 85

The Aussie Dollar consolidated against the South African Rand in recent months after a long appreciation. 63-day Twiggs Momentum is declining and breakout below R8.00 would warn of a correction to the rising trendline, with a target of R7.50*. Upward breakout, however, would offer an initial target of R9.00.

Index

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

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Forex: EUR, GBP, AUD, CAD, JPY, ZAR

The euro remains in a strong primary down-trend. The current rally is testing resistance at $1.32, but 63 -day Twiggs Momentum continues to trend downwards. Breach of support at $1.26 would signal a down-swing to $1.20*.

Index

* Target calculation: 1.26 – ( 1.32 – 1.26 ) = 1.20

Pound Sterling has breached its declining trendline against the greenback, warning that a bottom is forming. Breakout above $1.62 would complete a double bottom  reversal, testing the 2011 high at $1.68.

Index

* Target calculation: 1.62 + ( 1.62 – 1.53 ) = 1.71

Canada’s Loonie also signals that a bottom is forming.  Breakout above $1.01 would indicate the start of a primary up-trend, with an initial target of $1.06*.

Index

* Target calculation: 1.01 + ( 1.01 – 0.96 ) = 1.06

The Aussie is testing resistance at $1.08. Breakout would similarly signal a primary up-trend with an initial target of $1.18*.

Index

* Target calculation: 1.08 + ( 1.08 – 0.98 ) = 1.18

The greenback is testing primary support at 76 against the Japanese yen. Breakout would offer a target of 72*. Recovery above the declining trendline, however, would suggest that a bottom is forming — confirming the large bullish divergence on 63-day Twiggs Momentum — while breakout above 80 would signal a primary up-trend.

Index

* Target calculation: 76 – ( 80 – 76 ) = 72

The South African Rand is strengthening against the US Dollar, while encountering resistance at R8.50 against its Australian counterpart. Downward breakout from the ascending triangle would warn of a correction to test the long-term trendline at R7.50, while breakout above R8.50 would indicate another primary advance, with a target of R9.50*.

Index

* Target calculation: 8.50 + ( 8.50 – 7.50 ) = 9.50

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Euro sinks, dragging sterling lower

EURUSD broke through $1.36 warning of another test of primary support at $1.32. Respect of the zero line by 63-day Twiggs Momentum confirms a primary down-trend. Failure of support would offer a target of $1.22*.

EURUSD

* Target calculation: 1.32 – ( 1.42 – 1.32 ) = 1.22

GBPUSD is being dragged lower by the euro. Reversal below $1.60 warns of another test of primary support at $1.53 — as does 63-day Twiggs Momentum respect of the zero line.  Failure of support would offer a target of $1.46*.

GBPUSD

* Target calculation: 1.53 – ( 1.60 – 1.53 ) = 1.46

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Forex: Euro and the Aussie dollar strengthen

The euro is testing resistance at the former support level of $1.40, in the hope that the bailout out-lined today will rescue the euro-zone from its debt crisis. We will probably read fairly disparate views over the next few weeks before the varying viewpoints synthesize into a clear market direction. Reversal below $1.365 would warn of a decline to $.20*, while narrow consolidation below the resistance level would suggest a breakout and advance to the 2011 highs.

EURUSD

* Target calculation: 1.30 – ( 1.40 – 1.30 ) = 1.20

The Pound similarly rallied to $1.60. Respect would re-test primary support at $1.53, while breakout would target $1.67.

GBPUSD

* Target calculation: 1.53 – ( 1.60 – 1.53 ) = 1.46

The dollar broke support at ¥76, continuing its long-term (mega) down-trend against the Yen.  Target for the breakout is ¥72*.

USDJPY

* Target calculation: 76 – ( 80 – 76 ) = 72

The Aussie benefited from the weaker greenback, recovering above $1.04 to signal an attempt at $1.08*. Penetration of the descending trendline indicates that the down-trend is weakening.

AUDUSD

* Target calculation: 1.04 + ( 1.04 – 1.00 ) = 1.08

The Aussie and Loonie both closely follow commodity prices. Respect of the upper trend channel on the CRB Index would warn of another down-swing.
CRB Commodities Index
Canda’s Loonie is testing resistance at $1.00 against the greenback. Reversal below $0.975 would warn of another down-swing, while breakout above parity would target $1.02*.

CADUSD

* Target calculation: 1.00 + ( 1.00 – 0.98 ) = 1.02

The Aussie dollar completed a double bottom against its Kiwi counterpart (probably due to lost man-hours after celebrating their Rugby World Cup win). Expect a test of $1.32* followed by retracement to confirm support at $1.28.

AUDNZD

* Target calculation: 1.28 + ( 1.28 – 1.24 ) = 1.32

The South Africans went home early (from the RWC) and a descending triangle on the USDZAR warns of  downward breakout to test support at $7.20.

USDZAR

* Target calculation: 7.80 – ( 8.40 – 7.80 ) = 7.20

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Forex overview

The euro is consolidating above $1.365; failure of support would re-test $1.315, warning of another primary decline. A 63-day Twiggs Momentum peak below the zero line would confirm a strong primary down-trend.

EURUSD

* Target calculation: 1.32 – ( 1.40 – 1.32 ) = 1.24

The pound retraced to test resistance at $1.59/1.60 on the weekly chart. Declining 63-day Twiggs Momentum, below zero, suggests a strong down-trend. Reversal below $1.53 would offer a target of $1.46*.

GBPUSD

* Target calculation: 1.53 – ( 1.60 – 1.53 ) = 1.46

Canada’s Loonie resembles the Aussie dollar: reversal below short-term support at $0.975 would test $0.94. Respect of the descending trendline would also warn of a decline to $0.88*.

CADUSD

* Target calculation: 0.94 – ( 1.00 – 0.94 ) = 0.88

The Aussie dollar is testing support at $1.28 against its Kiwi counterpart after completing a double bottom. Respect of support would confirm the target of $1.32*.

AUDNZD

* Target calculation: 1.28 + ( 1.28 – 1.24 ) = 1.32

The greenback is ranging in a narrow band above ¥76, supported by the Bank of Japan. 63-Day Twiggs Momentum holding below zero confirms the strong down-trend.

USDJPY

The greenback recovered above R8.00 on the weekly chart against the South African Rand. Expect another test of R8.50. Upward breakout would warn of an accelerating up-trend that is likely to lead to a blow-off.

USDZAR

* Target calculation: 8.50 + ( 8.50 – 7.70 ) = 9.30

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Euro troubles Pound Swiss Franc

Concerns about its European trading partner dragged the Pound lower against the greenback. Target for the initial primary decline is $1.53*.

GBPUSD

* Target calculation: 1.59 – ( 1.65 – 1.59 ) = 1.53

The Swiss Franc is now headed for a test of parity against the greenback, dragged lower by its peg at €1.20.

CHFUSD

* Target calculation: 1.20 – ( 1.40 – 1.20 ) = 1.00

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Sterling fallout

The pound, affected by euro fallout, broke support at $1.59 to signal a primary down-trend. Expect a test of its December 2010 low at $1.53*

GBPUSD

* Target calculation: 1.60 – ( 1.67 – 1.60 ) = 1.53

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GBP tests support

The Pound is testing support at $1.60/$1.59 against the greenback, dragged down by rising calls for another round of quantitative easing to assist the flagging UK economy. Failure of support would signal a primary down-trend with a target of $1.53*.

GBPUSD

* Target calculation: 1.60 – ( 1.67 – 1.60 ) = 1.53

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