News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • $GBPUSD broke higher from a Symmetrical Triangle pattern late last week. Meanwhile, $EURGBP remains largely rangebound. Get your market update from @FxWestwater here: https://t.co/hnjGCww0ET https://t.co/0LcIv5Yudg
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/0gwSneZjOL
  • Another week of record breaking gains in the alt-coin space, while Ethereum (ETH) continues to print fresh highs and eats into Bitcoin’s (BTC) market dominance. Get your market update from @nickcawley1 here: https://t.co/robpKfDf8U https://t.co/3sOzL01rcI
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/K1F3QlB8ik
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/cXImPrjl8x
  • Crude Oil Forecast: Oil Prices Edge Lower Toward Trend Support -via @DailyFX WTI #CrudeOil closed the week slightly higher on balance, but the commodity is struggling at resistance as bears look to challenge trend support. Link to Full Analysis: https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/05/08/crude-oil-forecast-oil-prices-edge-lower-toward-trend-support.html #OOTT https://t.co/MvtP36QxY8
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/3f5sLijsVB
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/PO93mIKAZP
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/CHE6IOq3K5
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/Agl1q6EQyu
Daily Observations: Long GBP-crosses are Appealing

Daily Observations: Long GBP-crosses are Appealing

Christopher Vecchio, CFA, Senior Strategist

There's a case to be made for buying weakness in the British Pound, should it materialize in the wake of the Bank of England's May Quarterly Inflation Report. The BoE's QIR seemed a touch too dovish given the context of the current economic and political environment, which just saw a major short-term hurdle removed with the Conservative Party achieving an outright majority in parliament: there won't be a protracted period of negotiations between parties struggling to achieve a minority government with a weak mandate.

Political stability at home may eventually foster the conditions for the long-promised 'Brexit' vote, but that's beyond the scope of the current trading environment (that figures to be a factor in 2016, perhaps Q4'15 at the earliest). Our focus for now is on the interest rate environment, which sees that traders are pricing in the first BoE rate hike to come in March 2016, per the Sterling 90-day options (implied probability is 51.8%).

If the economy isn't going to take a step back as the BoE believes it will (per the downgraded growth and inflation forecasts released today), then there is room for interest rate expectations to be dragged further forward, providing a solid tailwind for the British Pound.

As recent as the first week of March, traders were pricing in December 2015 as the most likely period for the BoE to raise its key rate to at least 0.75%. I'm not making a case for the BoE to make its move then, but there is a void that has been created that can be filled (with the ground between the current March pricing and the BoE's mid-2016 expectation converging to earlier in Q1'16).

How might traders position for this repricing? Given the low rate environment, higher yielding currencies or those currencies in commodity-export driven economies seem most vulnerable (due to narrowing interest rate differentials). GBPCAD and GBPNZD are offering tantalizing long-term setups: GBPCAD has maintained its breakout from its February downtrend; and GBPNZD may be on the verge of a massive inverse head & shoulders formation (see the video in the linked article below for specific levels).

Read more: BoE Inflation Report a Minor Setback for Roaring GBP-crosses

To receive reports from this analyst, sign up for Christopher’s distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES