Big trend reversal chance in GBP - but currently on thin ice ...
Big trend reversal chance in GBP - but currently on thin ice - on very thin ice - on very very thin ice - on very very very thin ice ...
Things are going haywire in London - politically and/or in terms of market price actions.
The pound has been falling for weeks and has come back very well in recent days; after the cheapest exchange rates historically!
The fundamental question now arises: What now?
Politically, I don't want to go into too much detail.
Because after Premier Truss fired her Treasury Secretary last week, I fear that sooner or later the Conservatives on the island will be cleared for firing themselves.
The polls for the conservatives compared to the left on the island have not been as tight as before for years. Let's not fool ourselves; I think that most of my followers and readers, like me, are of course freedom-loving conservatives and prefer right-wing parties - at home and/or abroad (at the latest since Trump). But the press and the voters in the UK, which I'm getting from Germany, don't seem to believe the current governing party is capable of that; which not only ensures a volatile price action on the financial market. But also for plenty of fire in the daily newspapers; even social unrest (but please stay peaceful).
At this point, I don't want to go into any more detail as far as politics is concerned.
But i want to point out that after Brexit and now also with the help of the weak pound it seems like that a driven economy on the isle (without brussel and/or the EU) is pissible, trade can expand, as we can see from the expanded trade balance last week - and/or from historically high imports and exports. But even in the UK too, inflation is eating its own away like a cancer in the wallets of everyone on the island also - like here in the eurozone, expecially here in my homeland germany; and/or still in the usa too. Although we cannot currently speak of a recession (because there are no 2 negative annual growth rates yet), but we have to talk about stagflation (higher inflation rate as growth rate). And that hurts just as much in monetary material terms. Because it f+++s up the buying power of consumers and costs taxes - what we all are! Isn`t it? Anyway
That`s why I put together a GBP Index for all of us. It's a simple nominal index with the GBPAUD, GBPCAD, GBPCHF, GBPEUR, GBPJPY & GBPUSD exchange rates that I simply added together (and divided the JPY troght 100 at the same time). I have used a simple formula "((GBPAUD + GBPCAD + GBPCHF + GBPEUR + ( GBPJPY / 100 ) + GBPUSD ))", so that, if we want to trade the GBP, we can only focus on the nominal price action.
The most important price action zones @ daily chart
If the GBP is trading above 8.39849 with daily closed days in the back (like since yeserday, the 1st time back again),
then i would prefere the bullish side in the GBP. I give 8.39849 so much attention and meaning because it was a cyclical preliminary low, of a normal downtrend trend in GBP. If you will, the low during the calm before the storm, in September 2022. What I just briefly tried to formulate. And/or tried to pit it in the right context of the price action about the GBP. However, long story short findings: with prices above 8.39849 we are out of the downward spiral again as far as the GBP exchange rate price action is concerned! So with a cheaper pound of under 8.39849 we will always have to live with the risk of being dragged down. That´s why I p(l)ay so much attention to Thursday the 09/22/2022. And/Or because between the intraday high of 8.28704 from 09/22/2022 and just 8.40895 from 07/06/2022 als two major scenarios happened. Liz Truss became prime minister of the UK as leader of the Conservative Party on 06/09/2022. And Elizabeth II (Elizabeth Alexandra Mary) was Queen of the UK and other Commonwealth realms from 6 February 1952 until her death on 09/08/2022. Admittedly, I cannot quantify the effects of which either. But hardly anyone denies that these two scenarios have an impact! Or?
May the price action is with you :
Aaron
Use this technical analysis and/or technical indicators as a learning aid
- not as a recommendation for action (buy/sell or not to trade).
Things are going haywire in London - politically and/or in terms of market price actions.
The pound has been falling for weeks and has come back very well in recent days; after the cheapest exchange rates historically!
The fundamental question now arises: What now?
Politically, I don't want to go into too much detail.
Because after Premier Truss fired her Treasury Secretary last week, I fear that sooner or later the Conservatives on the island will be cleared for firing themselves.
The polls for the conservatives compared to the left on the island have not been as tight as before for years. Let's not fool ourselves; I think that most of my followers and readers, like me, are of course freedom-loving conservatives and prefer right-wing parties - at home and/or abroad (at the latest since Trump). But the press and the voters in the UK, which I'm getting from Germany, don't seem to believe the current governing party is capable of that; which not only ensures a volatile price action on the financial market. But also for plenty of fire in the daily newspapers; even social unrest (but please stay peaceful).
At this point, I don't want to go into any more detail as far as politics is concerned.
But i want to point out that after Brexit and now also with the help of the weak pound it seems like that a driven economy on the isle (without brussel and/or the EU) is pissible, trade can expand, as we can see from the expanded trade balance last week - and/or from historically high imports and exports. But even in the UK too, inflation is eating its own away like a cancer in the wallets of everyone on the island also - like here in the eurozone, expecially here in my homeland germany; and/or still in the usa too. Although we cannot currently speak of a recession (because there are no 2 negative annual growth rates yet), but we have to talk about stagflation (higher inflation rate as growth rate). And that hurts just as much in monetary material terms. Because it f+++s up the buying power of consumers and costs taxes - what we all are! Isn`t it? Anyway
- UK House Price Balance Drops to 26-Month Low
- FTSE 100 Closes at Over One-Year Low
- FTSE 100 Hits 31-Week Low
- UK Imports Hit Record High
- UK Exports Hit Record High
- UK Trade Deficit Widens in August
- UK 10-Year Gilt Yield Hovers at 14-Year High
That`s why I put together a GBP Index for all of us. It's a simple nominal index with the GBPAUD, GBPCAD, GBPCHF, GBPEUR, GBPJPY & GBPUSD exchange rates that I simply added together (and divided the JPY troght 100 at the same time). I have used a simple formula "((GBPAUD + GBPCAD + GBPCHF + GBPEUR + ( GBPJPY / 100 ) + GBPUSD ))", so that, if we want to trade the GBP, we can only focus on the nominal price action.
The most important price action zones @ daily chart
- 07/06/2022 8.39849 first intraday new low of the 2nd half of this year 2002
- 10/14/2022 8.40895 last closed price action
- 09/22/2022 8.28704 intraday high on this trading day
- 09/22/2022 8.14451 intraday low on this trading day
If the GBP is trading above 8.39849 with daily closed days in the back (like since yeserday, the 1st time back again),
then i would prefere the bullish side in the GBP. I give 8.39849 so much attention and meaning because it was a cyclical preliminary low, of a normal downtrend trend in GBP. If you will, the low during the calm before the storm, in September 2022. What I just briefly tried to formulate. And/or tried to pit it in the right context of the price action about the GBP. However, long story short findings: with prices above 8.39849 we are out of the downward spiral again as far as the GBP exchange rate price action is concerned! So with a cheaper pound of under 8.39849 we will always have to live with the risk of being dragged down. That´s why I p(l)ay so much attention to Thursday the 09/22/2022. And/Or because between the intraday high of 8.28704 from 09/22/2022 and just 8.40895 from 07/06/2022 als two major scenarios happened. Liz Truss became prime minister of the UK as leader of the Conservative Party on 06/09/2022. And Elizabeth II (Elizabeth Alexandra Mary) was Queen of the UK and other Commonwealth realms from 6 February 1952 until her death on 09/08/2022. Admittedly, I cannot quantify the effects of which either. But hardly anyone denies that these two scenarios have an impact! Or?
May the price action is with you :
Aaron
Use this technical analysis and/or technical indicators as a learning aid
- not as a recommendation for action (buy/sell or not to trade).
- SMA Cross 100 & 200: to get an overview about the midterm and/or longterm price action trend
- Zig Zag 1 & 5: to get an overview about 1% breakouts of last 5 trading days
- Ichimoku 5 & 5 & 20: to get an overview about the price action trend of the last 5 and/or 20 trading days