*Good morning/afternoon everyone!* The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130. *The MAIN THEMES I see today are* +EUR +CHF -CAD -JPY *Trading Biases* +EUR, +CHF, +GBP, -CAD, -JPY mildly +AUD, +NZD, -USD *Today’s Initial Trades* Here’s the summary – 1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912 2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275 3. Buy AUDCAD at .9531, Stop at .9503, target .9559 4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130.

*The MAIN THEMES I see today are*

+EUR
+CHF
-CAD
-JPY

*Trading Biases*

+EUR, +CHF, +GBP,
-CAD, -JPY
mildly +AUD, +NZD, -USD

*Today’s Initial Trades*

Here’s the summary --

1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912
2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275
3. Buy AUDCAD at .9531, Stop at .9503, target .9559
4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

Today’s Morning Views 06.15.2017 – Buy GBP, Buy USD

Swing

*Good morning/afternoon everyone!*

Right off the bat, the Bank of England shocked the markets today with 3 members calling for an immediate rate hike! Recent data including this morning’s UK retail sales report was terrible and yet, McCafferty, Forbes and Saunders think tightening is needed because core inflation has been stronger than expected and could overshoot while global growth and confidence is improving. They also see slack in the labor market diminishing. It was not enough to move rates today but its certainly an unexpectedly hawkish development. GBP should see more gains on this particularly vs. EUR, JPY and CHF.

Meanwhile today is an example of why picking the right pair combination is really important in trading. While the U.S. dollar is struggling to extend its gains versus JPY, it is higher against EUR and GBP (before BoE), allowing us to bank profits on our EUR/USD #1_easy2follow_trades. USD/JPY has a lot of resistance between 109.80 and 110 and then again at 110.66. With U.S. rates ticking only modestly higher, it may be a very slow crawl upwards for the pair. While we still see further losses in EUR, we bailed out early on our EUR/USD short because German 10 year yields are up significantly more than U.S. yields this morning. At the same time commodity currencies are losing their ground with AUD/USD flaming out despite strong labor data. NZD and CAD are likely to underperform EUR and USD.

*The MAIN THEMES I see today are*

GBP strength
EUR, CHF weakness
NZD, CAD underperformance
USD strength

*Trading Biases*
These will change after US data

+USD, +GBP
-EUR, -CHF, -CAD, -NZD
neutral AUD, JPY

*Today’s Potential Ideas*

Sell EUR/GBP at market now 0.8740, Stop at 0.8790, Target 0.8710
Buy USDCHF at market now 0.9738, Stop at 0.9688, Target 0.9768

Is GBP Rolling Over?

Is GBP Rolling Over?

Chart Of The Day

Over the past few weeks, UK data has not been encouraging. Although growth continues to maintain its pace, it clear that inflation is rising threat and the full impact of Brexit exodus has not yet hit the country.

For now, the UK consumer is trapped in a nasty vice between higher inflation and tepid wage growth, creating a troubling increase in credit growth. That’s why tomorrow’s UK Retail Sales could prove key as they shed light on the state of the consumer.

Meanwhile, cable has held up relatively well, mainly as a result of dollar’s recent weakness, but on a relative basis, it’s clearly struggling and having a hard time at the 1.2500 level, a failure there could prompt another selloff by the bears and push it towards the 1.2300 figure.

GBP – Brexit/Bremain Levels

GBP – Brexit/Bremain Levels

Chart Of The Day

Well with 48 hours to go it all comes down to this. The polls show a slight edge to the Remain side but with BBC debate tonight momentum can swing either way.

The vote is highly asymmetrical with the Brexit side creating far more risk for the pair. The upside should be capped by the 1.4800-1.5000 zone as relief should bring only a modest rally.

A vote for Brexit however could create unprecedented volatility and could send the pound plunging to 1.4000 and then quickly to multi year support at 1.3500. With brokers raising margins trading small is going to be critical as spreads and vol could explode.

Will BoE Send GBP Soaring Higher?

Will BoE Send GBP Soaring Higher?

Chart Of The Day

Will BoE Send GBP Soaring Higher?

Everyone should be watching the GBP/USD the next 24 hours because not only does the Bank of England have a monetary policy announcement but they will also release their Quarterly Inflation Report in which there could be significant revisions to their latest growth and inflation forecasts. Today, sterling traded very strongly against the U.S. dollar on the back of healthier data and if the BoE sounds optimistic, we could see the pair hit 1.4800. However handicapping the bias of the BoE is difficult because while we’ve seen a lot more improvement than deterioration in the U.K. economy since the last monetary policy meeting with the PMIs, inflation and unemployment rate improving, earlier this month Bank of England Governor Carney expressed concerns about inflation and growth and his sentiment could be reflected in the Quarterly Inflation Report. This report also looks back further than the past month and if we take a 3 month perspective, conditions have certainly weakened and lower forecasts are necessary. Since it is hard to gage the central bank’s tone, trades are best taken after the BoE rate decision.

Technically today‘s rally in GBP/USD has taken the currency pair out of a 2 week long consolidation. The pair broke above the 23.6% Fibonacci retracement of the June the January decline and is closing in on the 50-day SMA near 1.4725. That would be the initial target for a post BoE rally in GBP/USD. If the BoE is dovish, we expect GBP/USD to sink to at least the Fib level at 1.4523 and then possibly even 1.44.

How High Can GBP Rise?

How High Can GBP Rise?

Chart Of The Day

How High Can GBP Rise?

Sterling raced to its strongest level this year on the back of weaker U.S. retail sales, stronger U.K. wage growth and the residual boost from the Conservative Election win but with the Bank of England tempering the market’s expectations for tightening, how much further can GBP/USD rise? From a fundamental perspective, we know the U.K. economy is improving and we are still waiting on a turnaround in U.S. data but sterling has risen quickly in a very short period of time. The Bank of England also poured cold water on U.K. rate hike hopes by lowering their growth forecast for this year and next and warning that inflation could fall below zero before rising again. While the BoE is next in line to raise rates behind the Fed, it is looking more and more likely that they want to raise interest rates in 2016 and not 2015. U.K. data on the other hand continues to be firm with average weekly earnings rising at 1.9% versus the 1.7% forecast. Jobless claims dropped less than anticipated but the unemployment rate fell to 5.5% from 5.6%. Considering that inflation is nonexistent, the increase in wages is a net gain for U.K. consumers.

Technically, GBP/USD is closing in on key resistance near 1.5785, the 38.2% Fibonacci retracement of the 2009 to 2014 rally. If and only if this is broken will the next stop be 1.60.

BK Big Trade – GBP/USD Stopped Out

Swing

Stopped out of GBP/USD Trade

UK May Election Mayhem Trade

GBP/USD Orders

Place Order to Sell 1 Lot GBP/USD 1.5115

Place Order to Sell 1 More Lot at 1.5270

Stop at 1.5375

Over the past 8 trading days, we have seen a very strong rally in the British pound that has taken the currency right below 1.51. While we are a bit surprised by the strength of sterling 2 weeks before the General Election, this is exactly how GBP/USD traded leading up to the 2010 election. The currency pair trended higher and consolidated before selling off starting on April 27th. We believe that the market is under estimating election risk. The Torries can’t seem to secure a majority and the lack of a clear winner will drive GBP/USD sharply lower. This year’s election is even hairier than 2010 because of the potential power grab by smaller parties that could lead to more difficulty in forming a coalition. If this leads to a hung parliament it will translate into more losses for the currency. Five years ago volatility jumped to 17% in the days after the election and not only did GBP/USD fall 400 pips on election day but it dropped another 500 pips in the 2 weeks that followed.

While we believe GBP/USD will trade lower less dovish BoE minutes and the risk of a positive U.K. retail sales print means that sterling could see further upside before it settles for a move lower. Therefore we want to sell on a bounce towards the 100-day SMA at 1.5190.

GBP/USD Orders

Place Order to Sell 1 Lot GBP/USD 1.5115

Place Order to Sell 1 More Lot at 1.5270

Stop at 1.5375

GBP042215