gbpusd

·         Possible Double Top Currently @ 1.6605 and the Dec 30 2013

·         We may see a short term correction to 1.6505 and 1.6464 before a continued raise in the £/$

Sharp Fall in unemployment towards the policy 7% threshold

IMF warning global growth upgrade and more in 2014 expectation to 0.1% the forecast to 3.7% expansion in the global economy.

The financial system is slowly healing uncertainty  is decreasing

IMF has reiterated the long standing concerns  about frailty of the recovery and warned central banks not to withdraw monetary stimulus " Prematurely" if they it could get complex

Data out from the US 23/01/2014

·         The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment 

·                               Actual ........ Consensus 326k Previous 326K

·         The Counting Jobless Claims con:2.93  Pre 3.03

·         Existing Home sales (MoM) Con 0.4% Pre -4.3

Risk Management

 FX trading the ratio refers to the number of pips we expect to gain in profit on a trade relative to what we are risking in the event of a loss. applying this function is key in our analysis and planning of every trade this makes it easier to control risk easy because our traders will intuitively identify places to exit their trade. 

The key we have found is to find a positive ratio for our in house  scalping to swing  strategy and implementation take time  every time we are considering a position in an asset . 

A positive  2:1 / 3:1 Risk/Reward ratio is our preferred approach and collecting profits as soon as we are 20 to 30 pips in profit while reducing our risk by bring our risk exposure down to break-even.we have also considered hedging our exposure in the options market as a type of insurance against our long term position one of the fundamental and mistakes traders make in which we avoid is risking more on losing positions than the amount gained from a winner. This comes from traders using a negative risk/reward ratio and needing a much higher winning percentage to compensate for their losses.Our traders  are savvy and aware of this and understand that a positive risk reward ratio ultimately will put probability of success in their favour and are also equipped on  how to avoid the number one mistake that Forex Traders Make.
 

Above the graph depicts a sample channel trade on the GBPUSD. Traders looking to trade a Swing would expect to enter the market on a failure of resistance and bearish engulfing at 1.6447 pull back and possible end of a nested fifth wave see www.Timelessfx.blogspot.com. When setting exits on such a trade we have set minimum target stops should always be set outside a level of support or resistance. In this example we have a tight stop loss stops because of the trade line break to the upside and the good retail sales that came out that week for the Pound, jusy above the previous candle highs  at 1.6428. In the event price declines through this level, we would be expecting to gain initially 39 pips. To create a 1:3 Risk/Reward ratio and a extension of this as it heads to the lower target of  1.6313. or better. Now that we know a little about risk reward ratios
in the event that the trade does not go according to plan and reverser to the upside we will have to handle a small loss of 13pips. if we have not already brought out stop loss to breakeven which we eradicate complete exposure Article written by Mr Kasim Ijelu Director of Trading 

GBPUSD Weekly Outlook

GBP/USD reversed directions last week, losing close to one cent. The pair closed slightly above the 1.64 line. This week’s highlight is Claimant Count Change. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.

There was good news from both US and UK releases. Unemployment Claims remained at low levels, and Core Retail Sales and the Philly Fed Manufacturing easily beat their estimates. In the UK, CPI hit the BOE target of 2.0% and Retail Sales sparkled, hitting a nine-year high.

1. Rightmove HPI: Monday, 00:01. This housing inflation indicator continues to show declines, pointing to weakness in housing prices. The index posted a sharp drop of -1.9% last month, and the markets are hoping for better news in the upcoming release.
2. CBI Industrial Order Expectations:Tuesday, 11:00. This manufacturing indicator has looked solid in recent releases, and hit 12 points last month, matching the forecast. The markets are not expecting much change in the December reading.
3. Claimant Count Change: Wednesday, 9:30. This is the highlight of the week, and the indicator could have a major impact on the direction of GBP/USD. The indicator has been posting sharp declines, as the employment situation improves as the UK economy picks up. Another strong drop is forecast, with a December estimate of -32.3K. The Unemployment Rate is expected to edge lower to 7.3%, down from 7.4% last month.
4. MPC Asset Purchase Facility Votes: Wednesday, 9:30. The markets are expecting another unanimous, 9-0 vote for the most recent QE decision, which kept QE steady at 375 billion pounds.
5. MPC Official Bank Rate Votes: Wednesday, 9:30. The voting breakdown could lead to some volatility from the pound if there is an unexpected reading. The markets are anticipating a unanimous, 9-0 breakdown in favor of the most recent decision to maintain the benchmark interest rate at 0.50%.
6. Average Earnings Index: Wednesday, 9:30. This indicator has been moving higher, and the upward trend is expected to continue, with an estimate of 1.1% for December.
7. Public Sector Net Borrowing: Wednesday, 9:30.Public Sector Net Borrowing was a disappointment last month, as the debt ballooned to 14.8 billion pounds, up from 6.4 billion in the previous reading. This surprised the markets, which had expected a debt of just 6.6 billion. The markets are braced for another weak reading, with an estimate of 12.3 billion.
8. External BOE MPC Member Ian McCafferty Speaks: Thursday, 8:30. McCafferty will address a university audience in Nottingham. A speech that is more hawkish than expected is bullish for the pound.
9. BOE Executive Director Paul Fisher Speaks: Thursday, 9:00. Fisher will speak at a financial forum in London. Analysts will be looking for some clues regarding the BOE’s future monetary policy.
10. 10-year Bond Auction: Thursday, Tentative. The average yield on 10-year bonds has been very steady, and came in at 2.73% in the November auction. The indicator is a useful gauge of investor confidence, but is unlikely to affect the movement of GBP/USD.
11. CBI Realized Sales: Thursday, 11:00. The indicator had an outstanding November, jumping to 34 points. This crushed the estimate of 9 points. The markets are expecting another strong reading in December, with the estimate standing at 28 points.
12. BBA Mortgage Approvals: Friday, 9:30. This indicator is an important gauge of activity in the UK housing sector as well as an indicator of consumer spending. The indicator showed improvement in the last few months and the November release came in at 45.0 thousand. Another strong reading is expected for December, with an estimate of 47.2 thousand.

write up by forex crunch

AUDUSD 50/50

AUSSIE was unable to stop the Downward pressure in December and headed for a new low by the end of last year and wave C should head lower towards 0.8066 and 0.8311 travelling the same distance between wave X and A now consolidating with a range 0.8988 and 0.8837
expecting a relief rally on a break out or a bearish Drop to continue the trend down 

Alternative Bearish View

The US Majors

The Standard & Poor’s rose for the first time this year after slumping for three straight days, its worst start to a year since 2005.
I can count 5 wave up ending @ 1867.3 with the break out from the rising trend line  Guppy moving average indicating a string trend up. with no real sign of letting up yet.
The Standard & Poor’s 500 index gained 11.11 points, or 0.6 percent, to 1,837.88.

With the S&P 500 , rising 0.61 percent to 1837.88 as investors showed confidence in this Friday’s job report and fourth-quarter earnings beginning to be announced,traders took profits in the wake of 2013's rally that drove the benchmark index up nearly 30 percent.

Last year, the U.S. stock market reached all-time highs and saw its biggest percentage gains since 1997, but the first three trading days of 2014 saw some downward movement in stock prices on the S&P 500.

Daily 

A sharp decline in the U.S. trade deficit and upbeat German data helped improve market sentiment as the data pointed to strengthening economic fundamentals in both the United States and Europe.

"One way or the other, (the data) is all pointing to the story about how it might still be tough, but things are starting to point to better days ahead," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

hrly 

Dow Jones 

Dow Jones Daily
 From Novembers Peak in 2013 the  Dow Jones has continued to rally to new highs following our analysis  we can count 5 of v waves up starting from December 20012 the again from July 2013 ending near 1685 and with tapering on the card and the possible tapering in government QE the trend could be in its final leg.
 This could end any time from now and once it starts to turn we could be in for an important top being formed. Although conformation of the turn we be needed with the development of a 5 wave decline on the daily chart of break of near support would provide solid evidence that a top has been formed and we shall look for this i the near future around these prices.

The amazing performance the Dow Jones has put in is a wonder to look at and will go down in history while the T-note yields has jumped 78% and bonds fell. with optimism towards stocks and the economy is running high across the board, With the raging bulls flying high with the bears no where to be seen. This could prove costly as we start 2014.

As of today the Dow has been lifted by  health care stocks on Tuesday 7/01/2014. United Health Group, the nation’s biggest health insurer, and Johnson & Johnson both rose after analyst’s raised their recommendations on the stocks. 

It rose 105.84 points or 0.64 percent, to end at 16,530.94. The S&P 500 gained 11.11 points or 0.61 percent, to finish at 1,837.88. The Nasdaq Composite added 39.501 points or 0.96 percent, to close at 4,153.182.

08/012014