Get started

BOE

A dovish BoE leads to a weaker UK PoundThe Bank of England delivered a 75bps rate hike last week but also signaled warnings of a deep recession and that rates may have peaked. This brought broad base weakness to the GBPUSD with the price testing a low of 1.1150. Toward the end of the week, weakness in the DXY brought a brief respite to the GBPUSD, with the price trading higher towards 1.1365. Look for the GBPUSD to trade higher towards the 1.1380 price level before trading lower again. If the price breaks below the 1.13 price level, the GBPUSD could slide lower to retest the key support level of 1.1150 again.
Short
by JinDao_Tai
1
EURGBP short IF cross MABoth zones UK and Euro had rise their interest rates in 75bp. Days ago Lagard said ECB will continue raising rates to fight the inflation, and BOE are warning about a long recession, and the interest rates hikes in 30Y In this chart we can watch the price touching the resistance and a overbought at BB and RSI, changing the direction such as MACD that had already crossed the signal line. We can wait for the confirmation of short position after the candles cross the MA, and open our position against Eur if it's a strong short candle
Short
by AFCapital21
Today’s Notable Sentiment ShiftsGBP – Sterling dropped on Thursday after the Bank of England’s November meeting. The BoE said borrowing costs were likely to go up less than markets expect and warned that the economy was heading for a protracted recession even as it raised rates by the most in three decades. Summarising the meeting, Reuters noted: “The BoE raised Bank rate by 75 basis points (bps) in an effort to tame double digit inflation, taking it to a 14 year high of 3%. It was the biggest rate hike since 1989, apart from a failed attempt to boost sterling on Black Wednesday in 1992. In a highly gloomy message, the BoE said Britain which is grappling with a sharp rise in energy and mortgage costs has probably tipped into a recession. It said the downturn could cause the economy to shrink in both 2023 and 2024. Analysts said sterling was reacting to the much less aggressive tone of the BoE compared to the Fed, as well as the dire economic outlook.”
by thunderpips
GBP/USD plunges on Powell, BOE warningThe British pound is sharply lower today. In the European session, GBP/USD is trading at 1.179, down 1.83%. It has been a dreadful week for the pound, which has declined by 3.7%. The Bank of England delivered as advertised, raising rates by a super-size 75 basis points today in a 7-2 vote. This was the sharpest rate hike since 1989 and brings the cash rate to 3.0%. The jumbo rate hike comes at a delicate time, with the BoE warning that the UK is in a "prolonged recession". The BoE is projecting inflation will hit 11% before the end of the year and estimates that the recession could last two years. The Bank said that further rate hikes would be needed, but the terminal rate would be lower than what the markets have priced in, which is 5.2%. The BoE has not only witnessed a tumultuous period since the last meeting in September, but had to make its rate decision and forecasts without knowing government policy. A budget was supposed to be released last week but has been delayed until November 17th. Former Prime Minister Liz Truss' ill-fated mini-budget led to a near financial crisis and forced the BoE to buy massive amounts of bonds. Thankfully, stability has returned and the BoE began selling bonds earlier this week. The BoE's message to lower expectations about future rate hikes runs contrary to what Fed Chair Powell said at the Fed meeting on Wednesday. Powell warned that there were no signs that inflation had peaked and said that rates will peak at a higher level than previously expected. This hawkish message sent equity markets sharply lower and boosted the US dollar against all the major currencies.  The double-barreled punch of a hawkish Fed and grim warnings from the BoE have sent the pound reeling close to 2% today. There is resistance at 1.1346 and 1.1506 1.1118 and 1.1045 and providing support
by OANDA
Tug of War Among Central BanksThere is a tug of war situation among the central banks to hike interest rates. What is the bad and the good that will come out from this? i. Last week of October, European Central Bank officials announced another massive 75 basis point hike, increasing interest rates at the fastest pace in the history of the euro currency. ii. This week, the Federal Reserve is expected to increase rates by 75 basis points for the fourth time in a row. iii. The Bank of England could join the club on Thursday. Content: . The Interest Rate race has just started, why? . The impact on different currencies . It may not be all bad news, why? With higher interest rates, it attracts investors to buy its currency, in this case the USD. Currency is always a pair, when USD strengthens, the other side weakens. When a currency gets weaker, it is very bad news for inflation because they will have to pay more on their imports. Therefore in order to counter inflation, one of the best measures is to hike rate Expect more volatility in the currencies market, meaning currencies will take its turn to move. And if you are a trader, you should welcome volatility. Because with volatility, there are opportunities. GBP Futures 0.0001 = $6.25 0.001 = $62.50 0.01 = $625 0.1 = $6,250 1.1000 to 1.2000 = $6,250 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME:6B1!Education
by konhow
76
GBPAUD WOBBLES AHEAD OF RBADespite the highest inflation in three decades, Australian markets climbed on Monday, driven by banking firms, in anticipation of the central bank's much-anticipated moderate interest rate hike this week. In anticipation of the Federal Reserve's two-day policy meeting this week, Wall Street closed substantially higher on Friday with all major U.S. indices up 2.5% or more. Financials (.AXFJ) rose as much as 1.3%, with the "Big Four" Australian banks rising between 0.8% and 1.7%. The biggest increase was seen at the top lender in the nation, Commonwealth Bank of Australia CBA, which increased by 1.7%. The most recent data revealed that despite rising interest rates and growing inflation, retail sales in Australia held steady in September.
Short
by TradeyMarkets
GBP/USD jumps as Sunak takes the reinsThe pound has posted sharp gains today. In the European session, GBP/USD is trading at 1.1353, up 0.66%. Rashi Sunak is the new Prime Minister of the UK, the latest move in what has been a dizzying pace of political developments in the UK. Lizz Truss managed to stick around 10 Downing Street for a mere 44 days, after a mini-budget with unfunded tax cuts was a disaster and forced her to pack her bags. Sunak, a former finance minister, should fare better, but all agree that he faces an uphill battle in righting the leaky economy. Given all that has transpired over the past few weeks, if Sunak can re-establish a feeling of normalcy in the government, that will be a modest achievement. The challenge for Sunak will be immense. Inflation is running at 10% and the weak UK economy may already be in recession. The most recent data shows consumer spending, manufacturing and business activity on the decline. The cost-of-living crisis is getting worse and real earnings are falling, which could lead to worker unrest. Sunak has shown he is a capable politician but will need to keep the Conservative party united behind him if he is to succeed, with the opposition hoping they can capitalize on the political havoc and force a general election. The markets have reacted favorably to Sunak taking over as Prime Minister, as the British pound and UK gilts are higher today. Next week will be anything but dull, as the government is scheduled to deliver a budget on October 31st and the Bank of England holds its policy meeting on November 3rd. With inflation showing no signs of peaking, the BoE is widely expected to deliver an oversize interest rate in order to curb inflation.  A 0.75% hike is most likely, although there is an outside chance of a supersize full-point increase. GBP/USD tested resistance at 1.1373 earlier in the day. The next resistance line is 1.1471 There is support at 1.1266 and 1.1093
by OANDA
GBPNZD GAINS MOMENTUM TO THE UPSIDEThe GBP/NZD has dropped further since reaching a high of 2.032 and is currently well below the 2.000 mark where the pair ended on Tuesday. Despite the Bank of England's constant interest rate hikes, the annual inflation rate in the United Kingdom increased from 9.9% to 10.1% in September. In September, New Zealand's inflation rate fell marginally to 7.2% from 7.2% the previous quarter. Technically speaking, the GBPNZD has been extremely bullish since the beginning of October. The pair has been making higher highs on the 4hr period, and it is currently retesting previously broken structure. A break below 1.953 will confirm bears are in control hence invalidating the setup.
Long
by TradeyMarkets
GBPUSD not entirely convince by UK tax cut U-turnThe GBPUSD had seen significant volatility recently - Late September, the GBPUSD fell from 1.1215 to reach 1.0361 because of the announcement of tax cuts, the biggest in 50 years. - The BoE tried to rescue the situation by announcing plans to undertake temporary and targeted purchases in the gilt market (buying long-dated UK government bonds). This brought prices from 1.07 back toward 1.1215 - The government performs a U-turn on the plans to cut taxes, followed by the sacking of the finance minister, but the markets seem unconvinced, with the GBPUSD reaching a high of 1.15 but eventually settling along the 1.1215 price area. - Recent CPI data (10.1%) from the UK indicates continual inflation growth (sticky inflation) despite the best efforts of the BoE with increasing interest rates. - The GBPUSD is likely to continue trading with very choppy price action, with the overall directional bias likely to be more dependent on the strength/weakness of the US Dollar. - If the GBPUSD breaks below 1.12, the price could continue sliding down towards the 1.09 support area. Beyond 1.09 could see a significant drop toward 1.07. It is unlikely that the price could fall towards 1.03, barring surprise announcements again. - Upside potential on the GBPUSD seems unlikely and limited
by JinDao_Tai
1
GBPUSD 19th OCTOBER 2022UK GDP fell sharply, from showing growth to showing weakness. The following GDP data will determine whether the UK can be said to be in recession or not. The BoE Governor, Andrew Bailey, has been saying for several months that the UK will go into recession in the 4th quarter of this year. Will his prediction come true or can the UK change its fate? Here are some of the agenda and data releases scheduled for October 19th 2022 : 1. UK consumer price index data release for September 2022 2. UK producer price index data for September 2022 3. Release of data on the UK retail price index for September 2022
Short
by DNP-FX
3
GBP/USD dips, US retail sales nextGBP/USD has reversed directions today and is in negative territory. In the North European session, GBP/USD is trading at 1.1274, down 0.34%. The pound continues to show strong volatility and jumped 2% on Thursday. The sharp swings over the past few weeks were triggered by Chancellor Kwarteng's mini-budget in late September. Normally tame affairs, the mini-budget contained sweeping tax cuts to stimulate economic growth. Perhaps a solid idea in normal times, but with soaring inflation, high interest rates and the spectre of a recession, the markets absolutely savaged the plan. Even the IMF gave the plan a thumbs-down. The pound plunged to a 37-year low after the tax cuts were announced, and the Bank of England had to intervene due to a near-crash in the UK bond market. The new Truss government has had to make a humiliating about-face, and reports on Thursday that the government would abolish the planned tax cuts sent the pound sharply higher. The BoE was forced to step in with an emergency gilt-buying program, which is expected to end today. There is some concern that the bond market could show further volatility, in which case the BoE will have to again intervene. The government's clumsy attempt to slash taxes could cost Prime Minister Truss and Chancellor Kwarteng their jobs, and the political uncertainty and instability surrounding the new Truss government will only add to the pound's problems. The US wraps up the week with the September retail sales report. This will be a report card on how consumer spending is holding up, given red-hot inflation and high interest rates. Headline retail sales is expected to nudge lower to 0.2% MoM (0.3% prior), while core retail sales is projected to come in at -0.1% (-0.3% prior). GBP/USD faces resistance at 1.1373 and 1.1455 There is support at 1.1214 and 1.1085
by OANDA
GBP/USD - Guilt Crisis, Unemployment and GDP - UK in CrisisSummary. See video link below. Finance Minister to speak in Parliament today. May cause the Pound to Rally, or fall further Bank of England is currently intervening by purchasing 5 Billion Pounds of Guilts, which they have double to 10 Billion per day for this week. UK is releasing GDP numbers tomorrow, this will cause significant volatility. Overall I am short GBP/USD. Watch this video link to understand why. www.youtube.com
Short
by SmartMoneyTV
Will GDP shake up GBP/USD?GBP/USD is trading quietly for a second straight day. In the North European session, GBP/USD is trading at 1.1035, down 0.18%. The pound has not posted a winning day since October 12th and has lost 400 points during that time. GBP/USD dropped below the symbolic 1.10 line earlier today, and a break below 1.10 will likely increase talk of the pound following the euro and dropping to parity with the dollar. The UK labour market is one of the few bright spots in the economy, and today's employment report reaffirmed that the job market remains tight. Unemployment in the three months to August dipped to 3.5%, down from 3.6%, while average earnings jumped to 6.0%, up from 5.5% and ahead of the consensus of 5.9%. These rosy numbers are dampened by an inflation rate of 9.9%, which has badly hurt real UK incomes. The strong job market bolsters the likelihood of the Bank of England will deliver some tough medicine at its November meeting, perhaps a super-size rate hike of 1.0%. The BoE was forced to intervene on an emergency basis after the mini-budget almost caused a bond market crash, and investors have circled October 14th, which is the expiry date of the BoE's gilt-buying intervention. There are concerns that if the BoE does not renew its bond-buying, the result could be another exodus from UK government bonds. On Wednesday, the UK releases GDP for August, which is expected at 0% MoM, down from 0.2% in July. In the US, inflation will be in focus this week, with PPI data on Wednesday and CPI a day later. Headline inflation is expected to fall to 8.1% in September, down from 8.3% in August, but core CPI is expected to rise to 6.5%, up from 6.3%. Unless inflation surprises sharply to the downside, the release will not cause the Fed to rethink its hawkish policy. GBP/USD faces resistance at 1.1085 and 1.1214 There is resistance at 1.0935 and 1.0776
by OANDA
Bank of England Emergency Bond PurchaseLast week, UK pension funds, which hold highly leveraged bond derivative positions, were facing a nearly $1 trillion loss as bond prices crashed and yields rose. The crash in the bond market has been underway for years, but the tipping point occurred when the UK prime minister pledged to cut taxes at a time when inflation is soaring into the double digits. Cutting taxes worsens inflation because less taxes means consumers have more money to spend on inflating goods. Cutting taxes while inflation is high therefore risks worsening inflation or inducing hyperinflation. Fear of this caused the price of UK bonds to crash and yields to spike. (As many of you know well, bond prices move down when yields rise). This crash caused pension funds with highly leveraged bond positions to experience amplified losses, which caused these funds to need to put up more cash collateral on their losing positions. This could have caused a downward spiral because these funds may have had to sell bonds to raise more cash, which would have had a negative feedback loop that could have sent prices down further, amplifying losses more, and creating the need to raise even more cash collateral. The Bank of England had to make an emergency purchase of bonds. However, by purchasing bonds, the Bank of England has taken an action that will now make inflation worse (there will be a lag effect). Whenever a central bank purchases bonds, it is adding liquidity to the system (when the central bank buys bonds this has the effect of increasing the money supply). Increasing the money supply when inflation is at a multi-decade high is super risky. At best it could risk inflation staying elevated for longer, at worst it could spiral into hyperinflation. In the chart above, reproduced below, you can see that when priced in the British pound, crude oil prices are barely declining (as we would have expected from all the rate hikes). If anything, crude oil is looking poised to increase further. The Bank of England, and other central banks, are trapped. Until they stop monetary easing (adding to the money supply) and tighten the money supply such that rates are higher than core inflation, inflation will continue to get worse. Yet, as we now see in the UK, central banks cannot tighten the money supply sufficiently to accomplish this without causing a financial crisis. The rapidity with which the Bank of England switched back on the money printer, despite double-digit inflation, has me convinced that central banks will choose the hyperinflation route. In fact, hyperinflation is already happening in some countries. Argentina has hiked rates to 75% (not 75 bps, 75% or 7,500 bps) and yet inflation continues to spiral higher. There is actually no limit to how bad inflation can get. When people need to pay $100 trillion dollars for food, as in Zimbabwe in 2008, people usually stop believing that central bank fiat notes are valuable and the system collapses. Look at the chart below. I did not log-adjust the chart so that you can see that hyperinflation is when commodity prices rise exponentially over time. For the chart, I used the Invesco Commodity Index Tracking Fund (DBC) and priced it in Argentine pesos. I used cross plots on a smoothened moving average. This level of hyperinflation always leads to some kind of crisis. Either interest rates must crush demand and cause economic decline, or hyperinflation eventually causes a monetary crisis whereby people stop using the currency altogether. Commodity hyperinflation also leads to political instability and the rise of fascist or communist dictators. Furthermore, when these crises occur on a global scale, they can precipitate conflict, and conflict in turn can worsen commodity shortages. For those who have been thinking that inflation has peaked globally, there is no chart that I have seen which validates that conclusion. Indeed, as shown in the chart below, commodity prices continue to break record highs in some parts of the world. In most currencies, commodity prices appear to be bull flagging. Compare the below two charts. One shows how commodity prices continue to spiral higher in Argentina, despite the central bank hiking rates all the way to 75%, compared to 2008, when commodity prices fell while the central bank raised interest rates to just 12%. This shows that we are dealing with a much more dangerous type of inflation. I posted these figures to show just how bad inflation can get and the risks associated with monetary easing. Many people are believing the pig-in-a-python theory, where they think inflation is transitory and will improve when the massive COVID stimulus passes through the pipeline. However, what they fail to realize is that central banks have been putting an endless stream of pigs in the python for decades through monetary easing. Economies have become totally dependent on monetary easing and central banks are now trapped in needing to maintain it. Yet, if central banks continue monetary easing, inflation cannot come down. It just keeps spiraling higher so long as monetary easing continues, assuming commodity shortages also continue. Commodity shortages are deep-rooted and are due in part to war, deglobalization, aging and less productive populations, and climate change to name several factors. Monetary policy has little efficacy on these supply issues. Sri Lanka was the canary in the coal mine. It was the first central government to fall due to commodity hyperinflation. And yet, even after a central government collapse, commodity prices in Sri Lanka are still high. The chart below shows that commodities appear to be bull-flagging, and poised to go higher. Core inflation which is typically stable in the United States is now exploding to a 40-year high. If the Federal Reserve is to be successful at hiking rates to quell inflation, it must hike rates above the core inflation level. There is virtually no central bank with an interest rate higher than core inflation. Indeed, Japan continues to maintain negative interest rates. As I noted in a prior post, because negative interest rates incentivize the creation of money through credit, negative interest rates reflect limitless growth of the money supply. However, as alluded to above, the Fed is trapped. It must hike rates above core inflation, but it also cannot hike rates above core inflation. Decades of monetary easing have left a highly leveraged economy totally reliant on low interest rates. Hiking rates as far as would be needed to quell inflation would likely lead to an economic depression. Pension funds are already under tremendous strain from the hiking and yet the charts show that the scope of tightening that will be necessary is not even in sight yet. The best-case scenario is that commodity supplies improve and demand softens enough to stabilize rates but not so much that economies decline significantly. Even in this perfect mitigation scenario, stock market returns are likely to be muted for years to come.
TVC:UKOIL
by SpyMasterTrades
65
GBPJPY H1 - Short SetupGBPJPY H1 - A mental week to say the least for the GBP and YEN, yet again. Some monster moves, 600 pips seen on single M5 and M15 candles, thankfully, healthy corrections seen towards the latter part of the week, which has balanced zones and made things measurable for us to follow going into this fresh week. Huge 10R trade potential down towards the previous area of S/R, we saw a handful of rejections from this 162-handle last week, a dip as much as 250 pips which was great. But minor in the grand scheme of things. Failing this rejection, we can simply look for break and retest play from that 162 handle.
Short
by Trade_Simple_FX
1
Can I tell you about: The BoE InterventionThe GBPUSD had been on a significant downtrend (see the downward channel) due to several factors: - Strong USD, due to hawkish comments and aggressive interest rate policy path. - Stick inflation in the UK, at record high levels despite the BoE being among the first central banks to hike rates. - Uncertainty in the UK political environment following the ousting of PM Boris Johnson - Concerns over the conflict at the Russian-Ukraine border On the 23rd of September, the price broke strongly from the 1.1215 key support level following the announcement of tax cuts. The tax cuts (biggest in 50 years), paired with subsidies for households and businesses to cope with a surge in energy prices, were aimed at boosting the flagging U.K. economy amid stubbornly high global inflation and growing economic gloom in Europe. The market reaction was "worrying" as the government's new strategy relied on investors being willing to lend more to the UK. This saw the GBPUSD crash towards the 1.0360 support level. On Thursday 28th of September, the BoE took emergency action by undertaking temporary and targeted purchases in the gilt market (buying long-dated UK government bonds) in an attempt to stabilise the market and to calm the turmoil in financial markets amid the collapse in the pound. Following the intervention, the GBPUSD climbed steadily back towards the 1.1215 price area, reversing the decline for the week. The question now would be; can the GBPUSD climb higher? Technically, if the price breaks strongly above the 1.12 resistance area, the GBPUSD could climb towards the next resistance area of 1.1450, which is also the 127% fib expansion level. Fundamentally, a sustained intervention from the BoE and recovery of the GBPUSD will depend on the HM Treasury to fully indemnify the purchases which are strictly time-limited and to be completed in the next two weeks.
by JinDao_Tai
2
GBPUSD Mid-Term AnalysisSep 27 This Analysis was done using my full Strategy which includes: - Smart Money Concepts - Multi Timeframe Liquidity and Market Structure - Supply And Demand - Auction Thoery - Volume Analysis - Footprint - Market Profile - Volume Profile - etc This expectation is a framework in order to look for a potential trading setup, I don't just execute based on this levels, I always wait for confirmations on lower timeframes Links for free teachings + full mentorship down here and on my profile
GLong
by SmartMoneySource
2
GBP/USD slides as turmoil continuesThe roller-coaster continues for the British pound, which is down sharply today. In the European session, GBP/USD is trading at 1.0774, down 1.05%. It has been a remarkable week for the British pound, which has exhibited sharp volatility since Friday, when Chancellor Kwarteng unveiled his mini-budget. The package included unfunded tax cuts, despite weak a weak economy and inflation hovering at 9.9%. The financial package was criticised at home as well as abroad; the International Monetary Fund and US Commerce Secretary Gina Raimondo also panned the plan. Former US Treasury Secretary Lawrence Summers had perhaps the most unkind cut of all, saying that the UK had the worst economic policy of any major country. The British pound fell 3.6% on Friday and kept falling on Monday, hitting a record low of 1.0359. Bond prices tumbled and the turmoil became so acute that the Bank of England intervened on Wednesday in order to avoid a possible crash in the bond market. The BoE said that the crisis threatened financial stability and purchased just over one billion pounds in securities and will continue purchasing securities every day until October 14th. The bailout could hit over 60 billion pounds. The BoE's announcement sent bond prices higher and stabilized the bond market. The pound shot up 1.45% on Wednesday, but has reversed directions and is down sharply today. Prime Minister Truss is under heavy pressure to shelve the financial plan which has caused chaos in the markets, but for now, the government is standing firm and says it won't back down. Truss and Kwarteng will have to face the music at the Conservative Party's annual conference next week, and it's likely we haven't heard the last word on the mini-budget which has triggered a major financial crisis. GBP/USD is testing support at 1.0782. Next, there is support at 1.0644 There is resistance at 1.1052 and 1.1184
by OANDA
BOE, CPI and the FedWe're probably going to bounce from here (maybe muck around for the rest of the week and bounce next week higher); I think the BOE's QE decision is going to have people hoping that perhaps the Fed will do the same. The fact that a central bank can flinch and go the other way is a huge psychological change. This is somewhat of an exogenous event to the positive, to an already oversold market. Rally is going to continue (this is also area of the 200 weekly MA support). Then ahead is the CPI, and i think this may come in lighter than expected and the markets may rally even higher; hoping that the Fed will back off the 75bp hike and ease up going in to the end of the year. Of course it can be a terrible double digit number, in which case the markets will tank; basically translates to 'what the Fed is doing is not working, and they're driving the economy to the ground anyway'. But despite the data, and any easing of raising, since the Fed has pretty much said that they want to reach a certain target (despite what they say about being data dependent and whatnot), they're gonna plow ahead with the 75bp raise, then 50, as expected. I think this will be a big downer for the markets, and they will, despite fairly solid communication by the Fed, lose faith in the FED and find them to be stubborn and unwavering, leading the economy in to a recession in 2023. Having said that, there's always exogenous events that can change the course of this, mostly to the downside, whether that be Ukraine, Taiwan, or a worsending housing/real estate market condition in China, etc.
SP:SPX
by grenadetrade