Forex Investment and Currency Trading

GBP has the unenviable distinction of being the only G10 currency to underperform the USD over the past month and a half. The GBP has been responding to local events more than general USD weakness and remains the G7 currency most highly correlated with its domestic data surprise index. Analysts attribute this correlation to GBP’s heightened sensitivity to the outlook for UK monetary policy and the influence the local data rollout has on this outlook. CPI data on Tuesday will be an important event for GBP this week – inflation, along with activity data, will be key to determining whether [...]

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EURGBP has fallen from 0.9805 to 0.8696 in just over a month, so

Was the 0.9805 high on EURGBP the peak of a long term bull market that started in May 2000 instead of a relatively minor high?
Can we see EURGBP and EURUSD trade in opposite directions thereby potentially implying an aggressive rally in GBPUSD?

The analysis here leads us to think that the answer to the questions above is YES.
The last time EURGBP fell while EURUSD and GBPUSD rallied was from May 2003 when EURGBP peaked at 0.7255. What was going on in 2003?…

The last cycle low in interest rates saw the [...]

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Trading in cable presents its own set of challenges, because the pair is prone to sharp price movements and seemingly chaotic price action. But it’s exactly this type of price behavior that keeps the speculators coming back – when you’re right, you’ll know very quickly, and the short-term results can be significant.
Trading fundamentals of GBP/USD
The UK economy is the second largest national economy in Europe, after Germany, and the pound is heavily influenced by cross-border trade and mergers and acquisitions (M&A) activity between the United Kingdom and continental Europe. Upwards of two-thirds of UK foreign trade is conducted with EU [...]

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1) NO change and no statement – Bean, Sentence and Besley are still hawkish on inflation even with the worsening data – the 6bp that are priced into today are immediately pushed to the June meeting for a fully priced cut making next weeks array of data all the more important. Sterling will rally 75pts and then be sold off as the momentum has clearly shifted to the downside and the BOE is only delaying the inevitable and pushing the economy to the brink. 1.9650 was the support level – sell in front of there – will cover on a [...]

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