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Hi. I agree with Caseynotes, except that, in addition, I also feel there may be a little optimism for the pound as well. Two consecutive days up, and going up today also. Has broken up through the down channel from the 10 June. There is a slight buoyancy in the market I think from a belief that a Brext deal can be reached before the end of the summer and that a widely available Covid-19 vaccine may be within reach too. I think the Europeans are beginning to realize that a no deal is actually quite bad for them, especially given where the Euro is economically. Therefore, they may be more accommodating of the UK trade deal terms. I feel this has also added to the strengthening of the pound in this week.

On the down side, Britain just picked an argument with China over Hong Kong. Covid-19 will come back to bite as we open up the economy (look at Leicester) and the EU has announced that it is bracing itself for a no deal with the UK. I wouldn't accept that the pound is in a proper upward trajectory until it broke above 1.285, and then 1.35.

Let's see what US NFP brings and the outlook for the US economy.

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On 02/07/2020 at 17:40, JJP said:

Hi. I agree with Caseynotes, except that, in addition, I also feel there may be a little optimism for the pound as well. Two consecutive days up, and going up today also. Has broken up through the down channel from the 10 June. There is a slight buoyancy in the market I think from a belief that a Brext deal can be reached before the end of the summer and that a widely available Covid-19 vaccine may be within reach too. I think the Europeans are beginning to realize that a no deal is actually quite bad for them, especially given where the Euro is economically. Therefore, they may be more accommodating of the UK trade deal terms. I feel this has also added to the strengthening of the pound in this week.

On the down side, Britain just picked an argument with China over Hong Kong. Covid-19 will come back to bite as we open up the economy (look at Leicester) and the EU has announced that it is bracing itself for a no deal with the UK. I wouldn't accept that the pound is in a proper upward trajectory until it broke above 1.285, and then 1.35.

Let's see what US NFP brings and the outlook for the US economy.

The GBP was rallying last week as was the strongest currency, this week it's strength has been surpassed by the NZD. It is still strong along with AUD and CAD. There are no real fundamentals supporting this strength though, just broad-based optimism. Along with the comments mentioned above, last week, Chief economist Andy Haldane, was predicting a V-shaped recovery for the UK. The GBP is now a risk currency, so it could also be rising just based on the switch to risk in the markets. With the Yen, USD, CHF and EUR all performing much weaker than risk currencies at the moment, I predict  GBP/USD GBP/JPY will gain but in regards to  GBP/AUD, the AUD will outweigh the GBP to send this back to towards its long term downward trend. 

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On 02/07/2020 at 10:40, JJP said:

Hi. I agree with Caseynotes, except that, in addition, I also feel there may be a little optimism for the pound as well. Two consecutive days up, and going up today also. Has broken up through the down channel from the 10 June. There is a slight buoyancy in the market I think from a belief that a Brext deal can be reached before the end of the summer and that a widely available Covid-19 vaccine may be within reach too. I think the Europeans are beginning to realize that a no deal is actually quite bad for them, especially given where the Euro is economically. Therefore, they may be more accommodating of the UK trade deal terms. I feel this has also added to the strengthening of the pound in this week.

On the down side, Britain just picked an argument with China over Hong Kong. Covid-19 will come back to bite as we open up the economy (look at Leicester) and the EU has announced that it is bracing itself for a no deal with the UK. I wouldn't accept that the pound is in a proper upward trajectory until it broke above 1.285, and then 1.35.

Let's see what US NFP brings and the outlook for the US economy.

6 days later and it could be that we are on the way. Does the market still feel buoyant after the Chancellor's Summer Economic Update? I went long today and immediately lost 30 points before restoring. I hate long term trading. Back to scalping for me. :-)

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On 06/07/2020 at 06:12, majicktrader said:

The GBP was rallying last week as was the strongest currency, this week it's strength has been surpassed by the NZD. It is still strong along with AUD and CAD. There are no real fundamentals supporting this strength though, just broad-based optimism. Along with the comments mentioned above, last week, Chief economist Andy Haldane, was predicting a V-shaped recovery for the UK. The GBP is now a risk currency, so it could also be rising just based on the switch to risk in the markets. With the Yen, USD, CHF and EUR all performing much weaker than risk currencies at the moment, I predict  GBP/USD GBP/JPY will gain but in regards to  GBP/AUD, the AUD will outweigh the GBP to send this back to towards its long term downward trend. 

Interesting analysis. I wonder if AUD can maintain its strength given how low the Australian interest rate is. With no carry trade benefit and the economy in the biggest contraction for the last 30 years, I feel it does not currently offer a good expectation of return. However, as you say, it is very buoyant. Maybe the speculative market is mistaking general dollar weakness for risk on sentiment. 

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3 minutes ago, dmedin said:

Huge wild swings up and down = no trend to follow = lose money

er, are you referring to the eminently tradable recent medium term range? 

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take a look at the video in the last post of the technical analysis thread (trading support and resistance revisited).

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