Cable slammed down through the fix

Cable touched a session high of 1.6725 heading into the London fix but has been beaten up like the British men`s curling team afterwards, down to 1.6647 in a flash. The US dollar is broadly stronger with USDJPY also rising and EURUSD slumping.

Author: Adam Button

Adam Button is the managing editor of ForexLive™. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.

27 Comments

  1. Hi Adam,
    Any reason by the reversal of the GBP USD….?

  2. Just closed a cable short at 1.66338 :) from 1.6704 that was some fast cash! (*Disclaimer no I had no idea it was going that far that’s just where I jumped off).

  3. Yep – gbpcad is finally making its move.

    As I’ve mentioned earlier, I expect it to close today either at or below the broken resistance line.
    I also expect a much larger move down in the weeks to come.

    As such, over the weekend I’ll be holding nzdcad shorts, gbpcad shorts and nasdaq 100 shorts.

    Next week should prove to be pretty miserable for US stocks.

  4. Fixy Fixy the real driver looks like $ strength.

  5. Really dirty on cable here, was long from 1.6685 looking for 6740. Stopped at B/E with some slippage just to rub salt into the wound. Any reason?, or just the jittery markets!

  6. Andy – Yep, fix + eow flows, as you say USD buying (bit of risk-off into the w/e)

  7. NP…The move up in cable and euro (usd) seem to have been fix related and there’s talk of profit taking in cable now that the Vodafone deal has been completed. Of course, that’s the market talk so take it for what it’s worth.

  8. Bigger flows likely Tuesday.

  9. Cable is going to tank here could be a bull squeeze I hit the stop reverse at 1.6650

  10. Well, now that some big moves have been done, I think market will take a breather till the end of the session. To be continued next week.

  11. I’m amazed your lot managed to keep their focus long enough to beat GB….Sure i saw one of them unload his fishing gear and start to drill a hole . :)

  12. They must have been getting hungry ;)

  13. Indeed lilac. For example, I heard about an hour ago that there is $11 billion in pension fund equities selling and concomitant $5 billion in fixed income buying for pension fund end of month rebalancing next week.

  14. So nothing to do with the Vodafone rumour of huge demand for £ and nothing coming of it? GBP being pushed up to these elevated levels on the back of fairly good data. I expect we will see quite a few stops run on this and will see 1.65 before 1.68 sooner.

  15. I heard momentum funds joined in so there go the algos, crazy as ever…

  16. The evidence for this drop was there on the 1H chart. A series of lower highs and lower lows from 1.68 even on the 240 chart as well. Now coming up to the challenging zone of 1.6600 that breaks then down we go.

  17. There was that guy earlier, talking about BIG BOSS and such. He was a little bit too in-character to be as crazy as he looked.

  18. LOL…Adam and Dubsy…that fishing talk made me remember this hilarious fishing scene from Grumpy Old Men ;-) http://www.youtube.com/watch?v=1EwgvDvtqQs

  19. LoL Peter :) class

  20. Cable has simply upgraded it`s weekly range. It spiked the expected top and true to form, we see profit taking ahead of the weekend. Understandable! What would anyone sooner hold over the potentially troublesome weekend? Ever cheaper Dollars? Yen that haven`t got a clue what their purpose is these days? Gold? `nuff said about that one.
    Holding Dollars over the weekend is a no-brainer at these levels. Take the slow Monday off and get right on there again Tuesday/Wednesday for $1.7 highly psychological as next week`s upgrade in range and if you cannot bring yourself to abandon your everternal desire to short old Betty, then consider longs GBPAUD. It`s building a big hike and just waiting for the off ;)

  21. So no chance the breakout (false) at beginning of week was a top for now? If it breaks this next week I guess not but the charts don’t look like that’s whats going to happen. Today’s fix action or more specifically the after reaction seems to back this up to me. Normal profit taking shouldn’t have been so fierce, and also why so early before the close? My two cents fwiw…

  22. You may well be right RP. I have seen consistent calls for the decline in Sterling since we were attempting to break $1.6 and calls for a top there came from some eminent names including bankers and major hedge funds. Sterling then steamed through $1.625 which has proved to be a medium term bottom giving a target of 1.65. We have broken that level(65) substantially and with a fair degree of ease. Cable bulls are renowned for pushing the limits and many sellers have the ripped faces to show for it.
    I have seen no reason to abandon my longs since my first position to break $1.6. Fair degrees of consolidation and charts that show me higher highs, consolidation and higher lows. However, having said that, I will be reigning more in after the expected spike through $1.7 and avoid the dogfight ahead of a lot of noise above there, not to mention a very uncomfortable feeling prompting BoE to attempt talking it down.
    Market timing is all important to me and I suspect that after next week`s downgrade to US GDP, (expected but not written in imho), Cable will have consolidated again and make a final push for 1.7.
    As for “normal profit taking”, I`ve yet to see a norm for that one. So early before the close? Happens and I wouldn`t read too much into it other than uncertainty in Ukraine. Friday fear and greed with some crowd sense thrown in.

  23. May be premature but watched closely the 1 minute chart on the GBP pairs for quite some time today.
    Am inclined to think that the Friday close was not able to be fixed by the usual suspects. They lost control.
    So for lacking a better way to call it, will name it “the market strikes back”. I think high likely hood the algos of some major players hedging strategies are going tilt and this is a change in the market. Certainly for the GBP and as that has been the lead player there will be consequences.
    Will know better Sunday open, but if we get some decent gaps then change is in the air.
    Was unsure if i should post this seems a bit alarmist, but an idea perhaps to consider.

  24. I have been thinking about this after getting some fresh air and away from the number watching. Whatever the reasoning behind today’s price action, which I will never know in this case or in most cases of crazy moves, the fact is it happened, we all witnessed it. The big question on everyone’s mind is of course, now what? Well I certainly don’t know what next week will bring but I do have at least some recent fresh memory of something similar. It was this past new year when all risk on trades had blow off tops and then violently reversed. Both the tops and reversals came in ‘low volume’ time but the charts showed what happened and damage was done. Being short yen versus everything I had watched most of my paper profits wiped out due to having a nice wide stop on the trade. When ‘real’ volume trading continued after the holiday, I had my stops still about 100 pips out and HOPE that this was just another correction in this great unstoppable trend of a breakout that was most of the year in the making. Some trend lines still were intact that would surely serve as support for this. Well fast forward and most of you reading know that I was stopped out and that was the end of that trade. As far as I am concerned that trade has still not gotten back on track.

    Anyways take what you will from this ‘technical’ analysis. Of course every case is different as is every currency. The only thing I know for sure is I won’t be going long GBP next week and if I miss out on a move, so be it, there will be another one somewhere someday, probably not too long from today matter of fact.

    SI, I wish you luck in your trade and in no way am I trying to convince you to do anything other than what you see and feel. This expected spike through 1.70, you saying it above is not the first time I have heard/read that this week. A couple things I have learned in my short time doing this is that there is no ‘easy’ money and expect the unexpected…

    Peace out and have a great weekend everyone!

  25. Dear users, this trade was perfect trade of as I entered shorts 1.6722 and expected the london fix which usually starts around 10:40EST till end of London (11:30 EST) this is from my experience of price action for past 6 years. So why GBP drop? After all UK retails came out ugly!! so “A DROP” was definitely in the books but from which level? The daily chart I had this level marked. However i didnot expect 100 pip drop out of this. i was able to consume about 30-40 pips n rushed to book profits because I was trading via iTOUCH mt4 app. which i occasionally use when I am at this dayjob. But i had access to my “marked charts” which i rushed to fine wifii spot n entered my trades.. i am confident in my charts, you should but them from me sometime. .NOW, The speed of the move was remarkable. Note guys, 1.6632 test was DUE after bad retails? whats 1.6632 you ask? monthly charts 200 SMA. So determine direction of GBP above this price level being bull..below it bear..end of month is next week and it happens to fall on last day of the week (friday) big alert!!, good luck to you all.

  26. Cable slammed down through the fix. As they say in horse racing jargon,the fix is on .I guess it applies to Forex trading as well.

  27. No surprise by the pullback, stick the the big levels.

    https://www.tradingview.com/x/QmF9QjND/

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