EUR/JPY looks to be targeting 135.35-136.00 area if it can establish above the 100 day mva (133.77) - As posted on GVI Forex
GVI Forex Jay 18:27:15 GMT - 12/01/2009
I continue to draw horizontal lines on a chart for this pair as the range compresses. On the downside, 1.50 remains the key level and bottom of the range. Note how the 1.5070 area has been pivoted after the failed run at 1.50. Current top of the ran ge is 1.5130-50, minor resistance at 1.5090-00.
Otherwise, this is a hard one to call with the SNB likely still lurking in the background although not with the same vigor as when it was intervening openly.
GVI Forex Jay 17:57:05 GMT - 12/01/2009
EUR/GBP paused (low .9074) just above the tight daily trendline at .9070. See daily chart posted above.
GVI Forex Jay 16:11:18 GMT - 11/30/2009
GBP/USD trading soft but GBP focus is mainly on its crosses. Key GBP/USD support is not until below 1.6263, where it bounced from yesterday. See chart for key levels.
GVI Forex Jay 15:54:50 GMT - 11/30/2009
Note the dialy eur/gbp chart and how it bounced off the 100 day mva and then the 20 day mva. Key levels posted.
balanga02:27:00 GMT - 11/24/2009
Thanks for this topic! I find that thereâ€™s a lot of valuable information in this forum.
GVI Forex Jay 12:54:56 GMT - 11/20/2009
This post from the FF is an example of how crosses impact spot trading. In the case of the eur/usd, it was supported earlier by a rising eur/gbp, which offset the impact of a softer eur/jpy. This gave the eur/usd a bid but it could not get back above 1.4880 as seen on the chart posted above. Once eur/gbp topped out, the eur/usd lost its cross related bid and the bottom gave way.
From the FF:
London HC 11:14 GMT November 20, 2009
SUGGSTED TRADE FOR TODAY.: Reply
The reason I asked is because I am debating whether euro is giving a false sense of support out of its crosses or really has a bid.
UK06:07:37 GMT - 11/19/2009
Thanks for this post! I'm new at trading (using a demo account and even with a demo account, I find that I am losing! I am going through several forums and getting information so I can practice and trade for real in 2 months. This sure is a valuable piece of information!
GVI Forex Jay 11:58:33 GMT - 11/17/2009
Speaking of the 200 day mva, check out the eur/jpy chart. Next key level is the 200 day mva at 131.78
GVI Forex Jay 11:13:41 GMT - 11/17/2009
As a followup to a eur/gbp chart posted yesterday, the break of .8899 has seen this cross come close to its next target at .8839, the Aug 27 high and also the 100 day mva. The low has been .8849 and it is currently pivoting its 200 day mva is .8869. Back above .8899 is needed to suggest a bottom is in place.
The importance of this cross is evident by the way it has been supporting gbp/usd and weighing on the eur/usd.
GVI Forex Jay 21:26:36 GMT - 11/12/2009
Another head scratcher today in GBP/USD as a liquidating market provided support out of a sharp EUR/GBP retreat. This can be seen in the 1 hour chart posted above. This illustrates the complicated fx world we live in and why you need to be sware of the crosses that affect the currency pair you trade, even if you do not trade the crosses.
The following is from an earlier post on GVI Forex and an excellent call and buy 3 pips above the day low.
U.K J.B 16:22 GMT November 12, 2009
Jay , re the chart i sent you. I was hoping for one more push in stg. Long stg 1.6520 day trade stop 1.6480 good r/r
GVI Forex Jay 11:11:59 GMT - 11/11/2009
If you are looking for an explanation for today's spot price moves, take a look at the eur/gbp cross (see chart) and then compare it to gbp/usd. The read about the BOE inflation report just released to see the catlayst.
Then look at eur/jpy to explain the move up in usd/jpy and price action in other markets to see the rise in risk appetite.
As for eur/usd, it is being supported by crosses but most of the action has been in cross offsets elsewhere that have weighed on gbp/usd and boosted usd/jpy. EUR/USD faces an obstacle overhead by a rumored defense of a 1.5070 options strike said to run off tomorrow. On the downside, it needs to hold 1.5020+ to keep a very strong bid targeting the key 1.5063 high. This range (1.5020-63) is too tight to last for long.
GVI Forex Jay 18:07:00 GMT - 11/09/2009
Today is a classic example of how crosses impact spot trading and how the market is like a river running downstream, always looking for the path of least resistance to wind its way down.
In today's case, gbp/usd was bid while eur/usd followed with a lag as eur/gbp fell. Once eur/gbp found support around .8900, gbp/usd started retreating from its high as eur/gbp rebounded. As of this writing, eur/gbp is +75 pips from its low and gbp/usd is -130 pips from its high while eur/usd has been trading in a 10-20 pip range either side of 1.50.
Post mortem is with eur/gbp on the rebound and eur/usd unable to build further momentum above 1.50, the market followed the path of least resistance by pushing gbp/usd lower.
This sums up the US session so far and shows how crosses impact spot trading and why you have to be aware of the crosses that drive the spot pair you are trading, even if you do not trade those crosses. They will give you a clue.
Feel free to comment.
GVI Forex Jay 14:06:03 GMT - 11/05/2009
If you need an explanation for the price action over the past few hours, take a look at the eur/gbp chart posted above. I could have also posted a eur/jpy chart as well. These flows have given a bid to the eur/usd, bid to usd/jpy and takenm gbp/usd off its post-BOE high. In this case, the chart tells it all.
GVI Forex Jay 11:17:43 GMT - 10/29/2009
Check our eur/gbp chart as it threatens its key daily trendline. Implications for eur/usd and gbp./usd depending on whether it holds. Trendline comes in at .8946.
ANother exmaple of importance of crosses in spot trading. Feel free to comment.
GVI Forex Jay 10:49:07 GMT - 10/28/2009
The following JPY updates were posted on GVI Forex last night.
GVI Forex Jay 01:18 GMT October 28, 2009
This was almost a mirror of EUR/USD, just a day late as break of tight channel opened the floodgates. Next key support is not until 134.76. Note 20 and 100 day mva converging below market. Can treat it as a correction as long as above 134.76.
GVI Forex Jay 01:11 GMT October 28, 2009
Chart shows broader downtrend still intact with contra uptrend on shorter time frame also intact but losing steam. No obvious levels on downside so came up with the following cluster:
91.33 = Oct 16 high and mini breakout level
91.30 = 23.6% of 88.01-92.32
(90.67 = 38.2%)
Looks like JPY being bought against everything (note GBP/JPY as well as EUR/JPY and others)
91.30 initially held but then gave way. Also, 90.23 is the 20 day mva.
In eur/jpy, 134.76 has been broken and have to see how this level trades along with 135.00. Little worth noting below the market otherwise until the mva cluster, which comes in at 133.92 (100 day mva) and 133. 63 (20 day mva).
A good lesson from this is the price action after eur/jpy follwoed the eur/usd by also breaking it steep up channel. I posted charts on both before the fact and pointed out the risks.
Traffic to this page remains good but I would like to see some discussion follow my posts so feel free to comment.
GVI Forex Jay 10:42:29 GMT - 10/28/2009
USD/JPY daily chart posted -- See the next post for a discussion on usd/jpy and eur/jpy.
GVI Forex Jay 10:31:43 GMT - 10/27/2009
If you are looking for a reason for the firmer GPB/USD, look no farther than its crosses. See this chart for EUR/GBP, which is technically still in its downtrend but has lost momentum. The lower top has cooled talk of parity but only a break of the recent .8998 low would put the key trendline on the radar.
See below for a GBP/USD chart.
feel free to comment.
GVI Forex Jay 10:27:17 GMT - 10/27/2009
Firmer crosses boosting GBP/USD - see daily chart. Note how it has for the most part been pivoting its former down trendline since it was broken.
GVI Forex Jay 10:26:40 GMT - 10/27/2009
Firmer crosses boosting GBP/USD - see daily chart. Note how it has for the most part been pivoting its former down trendline since it was broken.
GVI Forex Jay 17:14:27 GMT - 10/26/2009
One steep channel broken (eur/usd). The other, which is still intact, is in eur/jpy, Comes in today at 136.20 and 136.75 tomorrow. See chart
GVI Forex Jay 12:39:34 GMT - 10/23/2009
Note how EUR/GBP held its 20 day mva (.9189) again, which has helped lift GBP/USD off its lows. See EUR/GBP chart posted earlier (below).
GVI Forex Jay 09:48:39 GMT - 10/23/2009
This GBP/USD chart is clearer.
GVI Forex Jay 09:37:04 GMT - 10/23/2009
This is another day where crosses tell the story. Check out the 5 minute EUR/GBP chart, moved up 1.8% on a 5 minute bar after the weaker-than-expected UK GDP. The other focus is on JPY crosses, note the eur/jpy daily chart I posted on the Forex Forum yesterday. Scroll down to see EUR/GBP and GBP/USD daily charts.
GVI Forex Jay 09:34:08 GMT - 10/23/2009
Post-GDP spike saw EUR/GBP pause at the 20 day mva -- see chart
GVI Forex Jay 09:32:58 GMT - 10/23/2009
GBP/USD 1.6410 is the former downtrendline broken this week so a key support - see chart
GVI Forex Jay 17:08:26 GMT - 10/21/2009
EUR/JPY is a key indicator of risk appetite so watch the steep, tight up channel on the daily chart. Key resistance levels are at:
GVI Forex Jay 09:56:38 GMT - 10/21/2009
If you want to see the importance of crosses in spot trading, see any GBP cross chart today. I have posted 3 charts as part of this update (scroll below). The chart above is a daily GBP/USD, which shows a trendline break that started yesterday and comes in today at 1.6434. This is the level on the downside along with yesterday's 1.6489 high that need to hold to maintain a bid although hard call from here given the way crosses (as opposed to outright USD) have fueled the move, typical of GBP. On the upside, key resistance levels are noted in the chart.
GVI Forex Jay 09:51:32 GMT - 10/21/2009
EUR/GBP breaking its daily trendline today at .9055. This level along with yesterday's .9071 are initial resisrance. On the downside, next key support is at .8981.
GVI Forex Jay 09:49:12 GMT - 10/21/2009
GBP/JPY daily chart. Building today on recovery following the trendline break of 5 days ago. Currently within 100 and 200 day mva.
GVI Forex Jay 16:11:00 GMT - 10/20/2009
It turned into a USD day after all as GBP/USD succumbed to profit taking after EUR/GBP break of .9079 failed to hold. This has seen GBP/USD give back earlier cross driven gains. As it turned out, book squaring in most markets have been the dominant theme.
GVI Forex Jay 13:37:51 GMT - 10/20/2009
Crosses becoming an influence today and note weaker EUR/GBP (and other GBP crosses) to explain the divergence between the GBP/.USD (higher) and other pairs. EUR/GBP is approaching key support at .9079 (still intact). Offsets have helped cap the EUR/USD upside and prevent a test of 1.50.
What started out as a USD day has turned into a GBP cross day.
GVI Forex Jay 10:30:39 GMT - 10/20/2009
This seems more of a USD day so far than a cross driven day. There are cross currents as usual but focus seems more on the dollar and eur/usd 1.50.
One of the reasons i have been posting in this thread is with the hope that it would generate discussion. Traffic has been good to this thread but it has been mainly to read what I wrote.
So, I encourage comment on anything you see here (feel free to agree or disagree, ask questions, post your own view) or on any other topic.
GVI Forex Jay 10:23:01 GMT - 10/19/2009
Today's charts illustrate the importance of looking at different time frames to put the overall; trend in perspective. One hour chart appears bearish but above the tight downtrendline after signs of a bottom, 4 hour also appears bearish but less so while daily chart shows the uptrend intact but consolidating.
The chart in this update is the EUR/GBP 1 hour. Scroll down to see the 4 hour and daily charts. Given the influence of crosses in GBP/USD, these updates are worth reading and charts worth viewing.
GVI Forex Jay 10:19:23 GMT - 10/19/2009
4 Hour EUR/GBP chart - note how the uptrendline has been broken and how the bounce off the low has it trading between the 100 and 200 hour mvas. Also, downtrendline drawn off the highs is still intact.
GVI Forex Jay 10:15:11 GMT - 10/19/2009
Daily EUR/GBP chart - note the broader uptrend and up channel is intact but consolidating after the tight uptrendline was broken while downside was contained above key support (horizontal line).
GVI Forex Jay 09:35:55 GMT - 10/16/2009
Focus is on GBP and I could show any GBP cross chart to show what has driven GBP/USD higher and offsets boost the dollar elsewhere. Instead I am posting a GBP/USD chart, which shows an impressive rally but so far yet to break its downtrend although it has moved above its 100 day mva. Key levels come in at:
1.6399 (intra-day high)
1.6467 (Sept 23 high and key daily trendline)
1.6517 (61.8% of 1.7016-1.5710)
1.6741 (Sept 11 high)
1.7016 (major Aug 5 high)
On downside, support starts at 1.6299 (Thursday high)
GVI Forex Jay 17:07:32 GMT - 10/15/2009
EUR/USD remains a sideshow to the crosses, thus the limited push above 1.4950 out of offsets. Easier to see with hindsight as it took nearly two hours before 1.4935 day support gave way. (as posted on GVI Forex)
GVI Forex Jay 16:26:40 GMT - 10/15/2009
Next key EUR/JPY level is 135.49 - see chart
GVI Forex Jay 15:53:47 GMT - 10/15/2009
For those who didn't read posts in this thread, suggest taking a look. EUR/USD held 1.4844 and EUR/GBP low was .9143 (vs. .9142 retracement level). Also note post yesterday about gbp/jpy setting up for a move. if you go farther down the page, w/e posts showed risk in the JPY.
Traffic to this thread is quite good but was hoping my posts would spark some discussion. One reason we setup this section is for more in depth discussions.
GVI Forex Jay 14:12:03 GMT - 10/15/2009
EUR/USD 4 hour chart posted. Note how the up channel is still itnact. See below for full update.
GVI Forex Jay 14:11:07 GMT - 10/15/2009
Note the 1 hour up channel that Al pointed out in his video last night has been broken while the 4 hour up channel is still intact. EUR/USD has been pulled on both sides by its crosses with a firmer eur/jpy providing support while downward pressure on eur/gbp has eased after finding support just above the .9142 38.2% level cited earlier (scroll below). .
Note how it held a test of 1.4844, this week's breakout level and key on the downside.
GVI Forex Jay 10:21:38 GMT - 10/15/2009
EUR/GBP - I could have put up any GBP cross chart (note GBP/JPY) to illustrate what is driving the market today. See this EUR/GBP chart as it mirrored what is seen in GBP/USD. Steep trendlines have been broken, bringing 20 day mva into view but not yet tested.
Supports are clustered between .9140-70.
- Low so far has been .9180.
- .9168 = 20 day mva (focus on close)
- .9157 = Oct 8 low
- .9142 = 38.2% of .8705-.9412.
- Big figures with "2" will set the bias today, EUR/GBP .92 and GBP/USD 1.62.
GVI Forex Jay 10:20:27 GMT - 10/15/2009
GBP/USD looks like a mirror of EUR/GBP, steep trendline broken but in this case it has moved above its 20 day mva (1.6038) and key resistance at 1.6120 has been broken. 50 day mva = 1.6289.
Charts show little until 1.6367 so no obvious resistance or stops. SImilar to eur/gbp .92, look for 1.62 to be a pivotal level today setting its bias.
Quite a move and a lesson that retacements/liquidations can be vicious in these type of trends.
GVI Forex Jay 19:51:58 GMT - 10/14/2009
Daily chart suggests GBP/JPY is setup for a move. Comments welcomed on this pair.
GVI Forex Jay 19:49:11 GMT - 10/14/2009
Daily chart suggests this pair is setup for a move. COmments welcomed on this pair.
GVI Forex Jay 19:25:37 GMT - 10/14/2009
One hour chart shows the uptrend resumed after a period of consolidation. Note tighter upchannel. Note the prior update (see below) for the daily chart and key trendline.
GVI Forex Jay 19:23:25 GMT - 10/14/2009
As a followup to this morning's update, eur/jpy bounced off its trendline today, but downside reaction has been limited. Trendline comes in at 133.65 on Thursday, Wednesday high was 133.76. See chart.
GVI Forex Jay 13:18:50 GMT - 10/14/2009
Another example of how crosses impact spot trading.
EUR/JPY AND USD/JPY
EUR/JPY bounced off 133.75 (trendline) noted in prior post (see below). This has help eased upward pressure on usd/jpy, which is back to its 89.45 (former trendline) after stalling below 90.00.
Note, other JPY crosses were a factor as well (e.g. GBP/JPY, etc).
GVI Forex Jay 12:06:20 GMT - 10/14/2009
Firmer stocks are seeing a rise in risk appetite and that has seen eur/jpy push higher but so far pause just shy of its key trendline. See chart - key levels:
133.75 (daily trendline)
133.94 (100 day mva)
High so far has been 133.70
Cross flows out of the JPY has seen usd/jpy renew its former down trendline (89.45), which has been pivoted in each of the past 3 days following Monday's break above it.
I noted on GVI Forex last night the market seems to want to take this pair higher but needs to see 90.00+ to encourage a push in that direction. Note, 90.00 has printed 2 days in a row coming into today but so far not tested today.
GVI Forex Jay 09:39:27 GMT - 10/14/2009
As posted on GVI Forex:
Sharp retreat has so far paused at .9301, a former key high and breakout level for the mvoe to .9412 yesterday. This suggests GBP/USD would need further dollar weakness elsewhere to fuel a further recovery as long as .9301 holds on the downside. See chart (above) and GBP/USD update (below).
GVI Forex Jay 09:37:50 GMT - 10/14/2009
As posted on GVI Forex:
Testing a minor daily trendline (see chart) and 20 day mva (1.6064) lies above. Would need a firm close above the 20 day mva to encoiurage a further recovery. Key resistance is at 1.6120. 1.6104 = 38.2% of 1.6741-1.5710. Note the eur/gbp update.
GVI Forex Jay 16:23:43 GMT - 10/13/2009
5 min chart shows gbp/usd had already bottomed and come off its loow by the time eur/gbp set its high.
GVI Forex Jay 16:19:51 GMT - 10/13/2009
5 min chart shows how it hit a wall above .9400 and then corrected, pulling gbp/usd higher and eur/usd lower. This wasn;t the only cross but most widely watched.
GVI Forex Jay 12:23:56 GMT - 10/13/2009
If the dollar had any legs (i.e. strength), this was a week where weaker JPY and GBP crosses should have seen it trade higher with eur/usd lagging. This would have required usd/jpy to maintain its breakout above its down trendline and then build momentum above 90. Instead, usd/jpy has backed off while gbp/usd remains soft but off its earlier low.
So, what happened?
With the help of hindsight, the market had trouble absorbing offset dollar selling out of jpy and gbp crosses, the latter being the real weak link. What I mean by offsets is the other side of a cross trade. For example, if the market is buying eur/gbp, then it is buying eur/usd and selling gbp/usd, the usd portions cancelling out. The difficulty in absorbing the eur/usd buying (i.e. usd selling) is a sign of underlying dollar weakness.
In the case of the eur/usd (see daily chart posted above), it led to a break of key levels at 1.4844 and 1.4867 although as of this writing, it has not followed through on the 1,4867 break, which is typical of the way this pair has been trading (one step back, 1-1/2 steps forward).
Feel free to comment or ask any questions.
GVI Forex Jay 09:27:21 GMT - 10/13/2009
GBP/USD chart - note absence of obvious support but still above its 200 day mva.
GVI Forex Jay 09:25:53 GMT - 10/13/2009
How important are crosses in trading GBP/USD? The EUR/GBP daily chart posted above illustrates the point.
GBP/USD continues to be pressured out of a weak GBP crosses. One of those is EUR/GBP, which faces some potentially stiff resistance looming above before parity (1.00) would come on the radar. These levels come in at:
On the downside, .9360 was yesterday's high and .9301 was the mini breakout level. Note the steep channel.
GVI Forex Jay 09:53:18 GMT - 10/12/2009
As a follow up to this weekend's posts (see below), I am posting some charts: eur/jpy, cad/jpy, eur/gbp and usd/jpy is successive posts. I didn' t post a GBP/USD chart but weak crosses are fueling its move lower as well. I am also posting a gbp/cad chart as it trades to lows not seen in 24 years.
EUR/USD has been a beneficiary out of offsets (CAD as well) but continues to run into resistance at 1.4740, which was also around its Far East high....just broken...next local resistance 1.4760-75
The title of this thread, Importance of Crosses in Spot Trading, is timely for a market like today, which is clearly cross driven.
Feel free to comment or ask any questions.
GVI Forex Jay 09:50:29 GMT - 10/12/2009
GBP/CAD TESTING LEVELS NOT SEEN IN 24 YEARS (MONTHLY CHART)
GVI Forex Jay 09:49:32 GMT - 10/12/2009
USD/JPY BREAKING ITS DAILY (DOWN) TRENDLINE, 20 DAY MVA AND TESTING A KEY 90.46 LEVEL (HIGH SO FAR .9046)
GVI Forex Jay 09:47:57 GMT - 10/12/2009
EUR/GBP BREAKING ITS RECENT .9301 HIGH
GVI Forex Jay 09:46:17 GMT - 10/12/2009
CAD/JPY EXTENDING HIGH AFTER FRIDAY'S TRENDLINE BREAK.
GVI Forex Jay 09:44:34 GMT - 10/12/2009
As a follow up to this weekend's posts (see below), I am posting some charts: eur/jpy, cad/jpy, eur/gbp (broke its .9301 high) and usd/jpy is successive posts. Note usd/jpy has broken its trendline, tested a key resistance (90.41 - high so far 90.46) and is currently picoting its 20 day mva. I didn;t p[ost a GBP/USD chart but weak crosses are fueling its mvoe as well. I am also posting a gbp/cad chart as it trades to lows not seen in 24 years.
EUR/USD has been a beneficiary out of offsets (CAD as well) but continues to run into resistance at 1.4740, which was also around its Far East high.
GVI Forex Jay 10:17:29 GMT - 10/11/2009
This is a 4 part update that was posted by me on GVI Forex (scroll down) to show the importance of crosses in spot trading using JPY pairs. Note the USD/JPY chart and how it has turned bid, approaching a key trendline. Then see how some of the other crosses helped fuel the move. The CAD/JPY break of a key daily trendline Friday was a highlight.
USD/JPY setup to test a key level on Monday, its daily trendline, which comes in around the Friday high at 89.88. If broken, key levels come in at:
You can look at commodity currencies vs. JPY for the flows driving USD/JPY higher but I will concentrate on EUR/JPY in this update. CAD/JPY and AUD/JPY charts will follow.
Unlike USD/JPY, EUR/JPY is not close to its trendline, which comes in around the 100 day mva. See below for key levels:
132.20 (50% of 135.34-129.06) - Friday high 132.23
132.44 (20 day mva)
132.94 (61.8% of 135.34-129.06)
133.92 (100 day mva)
133.98 (key daily trendline)
GVI Forex Jay 10:12:31 GMT - 10/11/2009
CAD/JPY broke its downtrendline on Friday - see chart
GVI Jay 10:11:31 GMT - 10/11/2009
AUD/JPY breakout targets 82.00 but hard to draw a trendline as it has been straight up for 5 days with no retracement.
GVI Forex Jay 13:40:13 GMT - 10/09/2009
Note main euro crosses (eur/gbp, eur/jpy and eur/chf) are all firmer today. This is helping the dollar firm vs. the jpy, gbp and chf while eur/usd is lower with a lag as cross offsets provide some support.
Yesterday prop traders were said to have sold eur/usd to hedge against short usd/Asia positions. Today euro is bid on its crosses. No explanation, only an observation.
HK REVDAX 03:06:22 GMT - 10/09/2009
GVI Forex Jay 10:14:30 GMT - 10/08/2009
Daily eur/gbp chart posted
GVI Forex Jay 10:12:52 GMT - 10/08/2009
A lower top on daily charts at .9280 vs. recent .9301 high (see daily chart in post to follow) has seen a retracement that has so far paused around .9190 for a 2-day double bottom (yesterday's low was .9188). This has so far formed a .9188/90-.9230 range (see 1 hour chart posted above). Within that range is a 1 hour downtrendline woirth watching.
Perhaps more important is that this has given gbp/usd support and allowed it to stop diverging and trade with the general dollar trend today.
One factor behind GBP's better tone may also be talk that Lloyds will issue GBP15 bln (presumably an equity offering).
GVI Forex Jay 11:38:38 GMT - 10/06/2009
I posted this on GVI Fiorex:
GVI Forex Jay 11:36 GMT October 6, 2009
The underlying flow is not GBP vs. USD but GBP vs. everything else. In the case of the eur/gbp, once eur/usd ran into resistance at 1.4750, offsets took over and sent gbp/usd lower. If gbp/usd had a bid, offsets would have taken the dollar a lot lower elsewhere but weaker gbp/usd has eased some of the pressure cooker effect. Now if we could only have predicted this price action beforehand...
GVI Forex Jay 10:43:08 GMT - 10/06/2009
EUR/GBP daily chart
GVI Forex Jay 10:42:30 GMT - 10/06/2009
Frustrating day for GBP/USD with weak GBP crossses keeping it from joining in on dollar weakness. It did extend yesterday's high briefly but has since fallen back below 1.60. I describe GBP as being 2nd to the bottom of the food chain and being treated in a similar category to the dollar in the current environment.
Source of the GBP/USD lag/divergence is its crosses. We continue to focus on EUR/GBP but you can look at GBP vs. most pairs today. I am posting a 1 hour chart here to show that despite the firmer tone today, it has not been a one way street (note that sharp but brief dip back below .92). A daily chart will be posted in the following update.
On the daily chart, you can see why some tried to sell against .92 but what happened when it failed to hold. EUR/GBP .92 is the level to watch gong forwards as above it exposes the recent .9301 high. Below it would cool the risk and allow GBP/USD to trade with the market vs. the dollar. The latter could also happen if EUR/GBP stabilizes today but above .92 is a sign of GBP weakness.
Richland QC Mailman 11:33:38 GMT - 10/05/2009
Thanks for the post Jay. Just really starting to appreciate how the crosses impact the majors.
GVI Forex Jay 10:25:59 GMT - 10/05/2009
Mailman, I posted this on GVI Forex over the weekend from New Hampshire, where I was hiking during peak Fall foliage. Amazing scenery! The scenario I posted below has worked out although movements have been modest.
Note, I focus mainly on the euro but use its crosses (mainly eur/gbp, eur/jpy and eur chf) in my analysis. As for eur/gbp, it has traded an inside day and this has allowed gbp/usd to move with the market. As of this writing eur/gbp is slightly firmer, gbp/usd has been trading with a slight lag vs. the eur/usd intra-day. This cross is not a key focus so far today. Weaker JPY has been the main cross focus.
Bretton Woods NH Jay 23:19 GMT October 3, 2009
week ahead: Reply
What a day! Cold, rain and we did a 4 hour hike up a mountain. All fogged in on top but was a great hike despite slippery rocks.
Looking through the news,
- Choppy but in the end a limited reaction to the jobs report
- Nothing from the G7 - as expected
- Yes by Ireland - most likely outcome
Despite no suprises over the weekend, the combination of the 3 (above) suggest a firmer eur/usd opening on Monday (Sunday night here). If it doesn't happen, then perhaps the dollar has some legs but logic argues for at least a steady to firmer eur/usd to start.
How stocks perform Monday will be a key factor for the day's trading.
Just some thoughs from New Hampshire.
Richland QC Mailman 11:39:48 GMT - 10/03/2009
Hi Jay. Looking at eur/gbp, on the daily, we could be seeing the beginning of a downward wave/correction off 9300 high (78.6% fibo area 9494-8400). However, before we jump into very premature conclusion, we need to see that 9070 violated sharply. On the hourly chart, we can see it has the potential to go sloping down to 9100 area again (which can drive gbp/usd up). (NOTE: Actually I like the scenario of a eur/gbp continuance of corrective wave from 9300, breaking 9070 to help propel the rally of gbp/usd from 1.5800 to 1.6125.)
On gbp/usd daily chart, 1.5800 is a MAJOR battleground based on horizontal TL support which coincides more or less with the 50% fibo (1.4395 - 1.7042). As we can see, it bounced off 1.5800, enough to reach 1.5954, still managing to close above 1.5900 handle. On the hourlies, technical indicator slow stochs once again has signalled a change in direction, a BUY. We could have seen already a temporary base 1.5800 - 5900, enough to propel to 1.6125 again. Please note that 1.6125/30 is around both 100 & 200 EMA resistance on daily chart, a significant MAJOR BATTLEGROUND. A break of 1.6125 would signal the retracement to 1.5800 is over and the market is poised to set its sights on 1.6400.
GBP/USD INTRADAY PLAN for Monday Oct. 05, 2009 - BUY ahead of 1.5880 central pivot with targets 1.5970 then 1.6041. BUY more at 1.5830 and take profit at 1.5880/90. SELL @ 1.6120 for some 30-50 intra-day raiding.
That is all folks... Jay, hope you and the rest of our members would find value to this humble thoughts of ours.
Thanks Jay for sharing about the crosses. Honestly, I am just starting to have a grasp of it.
London M 14:05:25 GMT - 10/01/2009
thank you so much for your kind investigation.
I NEVER heard of 1:15 fix on the quarter end.
will keep in mind from now on.
GVI Forex Jay 13:44:53 GMT - 10/01/2009
London M. It is an earlier fixing due to quarter end. Nothing special about it otherwise but something to keep in mind at quarter end.
GVI Forex Jay 12:58:03 GMT - 10/01/2009
I had the same question yesterday when UK JB mentioned it. I will investigate and report what I find.
London M 09:58:04 GMT - 10/01/2009
Jay, thanks for this eur/gbp story. I read it with huge interest.
one question if I may be allowed to ask,
what is 13:15pm fixing?
I thought the London fixing time is 16:00pm London time. Is there any ''fixing'' at 13:15pm, for the future reference?
big thanks in advance.
GVI Forex Jay 09:42:34 GMT - 10/01/2009
This is from a post on GVI FOrex and is a recap of what happened in EUR/GBP and GBP/USD yesterday. It shows how the market can be morew than looking at charts in this world of electronic trading. See the 1 hour chart posted above and the eur/gbp reaction off the .9080 double bottom:
Yesterday proved to be all about the RBS lhs fix order at 1.15pm and moves leading up to it and after it were all down to this order. The entire market was aware of the transaction through rumours and the trade being advertised on the radio and as expected the cross came under heavy selling pressure from the open. Prop/model sellers were seen everywhere but considering the amounts that were going through the fix always looked like the smaller side. Around 1pm brokers were asking interbank players for requests to fill buy orders at the 1.15 and these were turned down giving us an indication of the size going through (two requests 300mio 160 mio! we know of). RBS began selling around 1pm moving us from 0.9110-15 to 0.9080 and already you could see the market feeding on the offers and the pair sprang back quickly from 80 offered to 00 bid . Once the fix began (0.9093 around 3 yards we understand) the market inverted (98/93) and Reuters crashed! to add to the confusion. Instantly we moved back to 0.9110 then 0.9125 as the scramble to cover shorts began. It turned out RBS machine crashed totally and they had no idea of the size of their shorts and once positions were calculated the order had been over filled and RBS then had to buy good size back moving it to 0.9140 and 0.91785 in Asia.
In all of this cable was the slave to the order and an easy sell anywhere close to 1.61 coming down to the mid 1.59's at the London close.
GVI Forex Jay 11:00:26 GMT - 09/30/2009
EUR/GBP daily chart
GVI Forex Jay 10:58:05 GMT - 09/30/2009
There appears to be many who have looked to fade the GBP/USD rally and have been squeezed today. In fact, I do not remember seeing a buy call today.
One source of gbp/usd demand has been a softer eur/gbp and as you can see from the accompanying chart, it is trading in a 1 hour down channel since topping out Monday at .9301. So, at least in the short-term, this market has changed and one flow that has been pressuring gbp/usd lower (i.e. eur/gbp) has been negated, which has he;ped the gbp/usd rebound. A similar chart in gbp/jpy shows a 1 hour up chaneel but as of this writing, looks like it may be running out of steam
However, looking at the daily chart (to be posted in the following update), eur/gbp is only in a retacement mode. So far, it has held .9079, 38.2% of the leg from .8720-.9301.
GVI Forex Jay 10:42:43 GMT - 09/29/2009
EUR/GBP daily chart
GVI Forex Jay 10:41:43 GMT - 09/29/2009
One look at the eur/gbp 1 hour chart (see above) shows one flow that has boosted gbp/usd and weighed on eur/usd today. Most times these pairs do not move in opposite directions and shows to the extent the market got carried away with the breakout to the EUR/GBP upside. The catalyst was a better UK CBI report - as always reaction to news shows more than the news itself.
We have also posed a daily chart (see next update - above) so you can put the overall price action in p[erspective, which is still just a retracement.
Key eur/usd support is 1.4515. Currently the 20 day mva at 1.4549 is being pivoted.
Once again, as John has been pointing out, this is a cross traders market.
GVI Forex Jay 20:10:49 GMT - 09/25/2009
GBP/JPY daily chart. See post-mortem update in the prior update below.
GVI Forex Jay 20:08:46 GMT - 09/25/2009
Post mortem on today's trading.
One picture says a thousand words. Look at the gbp/jpy (1 hour) chart and it says it all. It never recovered from the break of the horizontal support.
Look at eur/gbp and it will tell you why eur/usd lagged despite a sharp fall in eur/jpy and why gbp/usd stayed under pressure. I will post a daily gbp/jpy in the next post. Had usd/jpy held above the 90 level, gbp/usd and to a lesser extent eur/usd would have traded even lower assuming jpy crosses traded the way they did today.
GVI Forex Jay 10:31:41 GMT - 09/25/2009
As a follow up to the prior update,
what has happened today is a textbook cross driven move. Of course, it is easier to see it in hindsight rather than in the heat of the battle.
What has happened is main flows have been in JPY crosses. Once the dollar topped, e.g. gbp/usd. eur/usd, aud, etc found support, cross offsets took over and drove usd/jpy lower to test the key 90 level, pulling other currencies along with a lag.
Note, there was talk this week that USD/JPY 90 would be fiercely defended to protect an options strike. Low has been 89.97. It is not clear what type of options lie at 90. Now, market has to see if 90 holds for if it does, other currencies would need to move lower (higher dollar) for JPY crosses to firm further from here. Alternative is JPY crosses stabilize if 90 holds.
As I have said, there are various scenarios that can unfold in a cross driven market but there are only 3 variables, currency #1, currency #2, cross rate derived from currency #1 and currency #2 (e.g. eur/usd x usd/jpy = eur/jpy)
Please let me know if this is clear. Feel free to ask questions or make comments.
GVI Forex Jay 09:55:56 GMT - 09/25/2009
John posted this in the FF and full report on GVI Forex TODAY. Worth a repeat:
GVI Forex john 09:39 GMT September 25, 2009
GVI Forex Trading Support: Reply
From GVI Forex N.Y. Open analysis...
Markets are in a consolidation phase at the moment. That does not mean that equities are ready to crash, but they could be probing for support. The EUR/USD continues to be heavily influenced by equity prices and vice-versa. When the USD improves, currency pairs tend to trade more independently. Itâ€™s a cross traders market...
- JPY strongest - end of quarter repatriations a factor
- GBP weakest - talk earlier was stops at .92 (high so far .9191)
- EURO caught in the middle, firmer vs. GBP, softer vs. JPY
- EUR/CHF finding support again around 1.5080. Probe of a 1.50XX likely to raise risk of SNB intervention although would not be surprised if it is working behind the scenes
I posted a eur/usd chart to show importance of 200 hour mva
GVI Forex Jay 10:12:35 GMT - 09/24/2009
EUR/GBP daily chart posted above - breakout through .9082
See full update below.
GVI Forex Jay 10:11:46 GMT - 09/24/2009
The purpose of this thread is not to analyze GBP but to illustrate the impact of crosses on spot trading. Today GBP/USD is sharply lower while offsets out of sharply weaker GBP crosses are helping to weaken the dollar elsewhere.
GBP/USD has fallen sharply today and one look at any GBP cross chart will show where the selling is coming from. We have been focusing on EUR/GBP so will post that chart but its losses are more pronounced in EUR/JPY. The catalyst were comments from BOE Governor King said a weaker sterling was helping to rebalnace the UK economy. This is similar to comments made earlier in the week but as you can see by the 5 minute EUR/GBP chart (above), it caught the market by surprise or leaning the wrong way. In any case, the reaction to news always tells more about the market than the news itself.
I posted this on GVI Forex over the weekend and worth re-posting here after the breakout through .9082.
GVI Forex Jay 09:42 GMT September 20, 2009
eur/gbp .95?: Reply
I have seen forecasts calling for a higher eur/gbp targeting 95 and parity (1.00). I am not so bold to make such a prediction and only looking at what the charts show. All I know is that eur/gbp has broken out to the upside and should .9082 be firmly taken out, it would expose a risk for .95 as the next key target. These are the key resistance levels from the chart posted above:
It is simple algebra. If eur/usd stays within 1.45-1.50, gbp/usd would need to trade somewhere within 1.5263-1.5789 to reach a .95 target. You can work other potential levels for the eur/usd and corresponding gbp/usd rates but can see from the above scenarios, the risk for gbp/usd should the market make a run at eur/gbp .95
GVI Forex Jay 10:58:54 GMT - 09/23/2009
I could have added other GBP crosses as well. See this 5 min eur/jpy chart. Note how offsets have weighed on eur/usd and put a bid under usd/jpy. Helps to explain spot movements.
GVI Forex Jay 10:01:47 GMT - 09/23/2009
This is the eur/gbp 5 min chart that goes along with the prior update.
GVI Forex Jay 10:00:36 GMT - 09/23/2009
This was posted on the FF and brings up another exampole how crosses influence spot trading.
London M 08:43 GMT September 23, 2009
why GBP goes up so rapidly?
was there any surprise which I have missed on BoE minutes?
One picture (actually 2) says a 1000 words. Look at the chart (above) for GBP/USd and then look at the EUR/GBP 5 minute chart I posted in the next update (can only post one chart per update). I could have used an overlay but in this case, prefer to post each chart separately. These charts show how cross moves can fuel and often exaggerate spot moves.
As for the GBP, the catalyst appeared to be the BOE minutes and the unanimous decision to keep QE at GBP175 bln. The real catalyst was a market probably short GBP/USD and surely long EUR/GBP. making stops an inviting target.
lkwd jj 21:44:05 GMT - 09/22/2009
correction.today, with euro up vs usd less than gbp vs usd , eurgbp had to fall.
lkwd jj 19:48:08 GMT - 09/22/2009
what i'm seeing from these posts is this. lets take example where eurusd and gbpusd and eurgbp all equal 1. if euro and gbp go up vs usd to 2 ,eurgbp will stay at 1. if instead eurgbp goes to 2 then gbpusd stays at 1. this past week as euro moved up vs usd and so did euro vs gbp it pur pressure on gbp to stay where it was or go lower . that depended on euro vs gbp. if that went up , gbp goes, down if not it stayed where it was. today both gbp and eoro went up with eurgbp going up more as euro was very strong.
GVI Forex Jay 08:55:43 GMT - 09/22/2009
Another example of importance of crosses in spot trading:
The purpose of this post is to illustrate how a cross move can inflkuence the spot market.
EUR/GBP tested the .9082 level I posted over the w/e and after yesterday's .9080 high, it is essentially a 2-day double top at a key resistance. On the other side, the low today at .9043 is just above yesterday's .9040 low, above which keeps .9082 on the radar. See chart (above and my post below).
GBP/USD played some catch-up and extended today's gains after EUR/GBP backed off from the .9082 level.
GVI Forex Jay 15:05:17 GMT - 09/21/2009
It is hard to focus on too much but what caught my eye when I walked in today was the eur/usd lag out of firmer crosses. Once it lost cross support, eur/usd came under some downward pressure.
As per my previous post, gbp/usd backed off its highs and this helped pressure eur/usd lower as gbp/usd settled into a range. Had gbp/usd been able to get back above 1.62, there would have been less cross pressure on the eur/usd downside. (Note gbp/usd has since rebounded back above 1.62 but was more of a dollar than cross driven move as eur/gbp holds steady)
Once eur/usd held a 61,8% (1.4515-1.4767) level around 1.4611 and eur/gnp found support (around .9040), the combination helped to ease downward pressure on the eur/usd and it came off its low.
In these cases, it is hard to tell what is leading, the cart or the horse, but movements in eur/gbp (among other crosses) were a factor again today.
GVI Forex Jay 11:08:00 GMT - 09/21/2009
A further illustration why it is helpful to watch crosses when trading spot:
See my prior post on eur/gbp. In today;s trade, eur/gbp made a run at the key .9082 level and paused 2 pips shy of it. EUR/GBP then hen backed off its high. This eased downward pressure on gbp/usd, which has since bounced from its low.
gbp/usd 1.6190 vs. 1.6135 low
eur/gbp .9058 vs. .9080 high
Feel free to post a comment or ask a question on this subject.
GVI Forex Jay 18:38:51 GMT - 09/18/2009
This was posted today on the Forum Forum on this subject:
Belgrade AS 17:33 GMT September 18, 2009
understood!thank you very much!
GVI Forex Jay 17:27 GMT September 18, 2009
AS, a lot depends on eur/usd. If eur/usd stays in a range like today, then gbp/usd bears the brunt of the eur/gbp cross selling. If eur/usd had continued on to new highs, then the gbp/usd selling would have been more easily absorbed in a weak dollar environment. Each case has to be viewed in the context of the day's price action. Not an exact science.
Belgrade AS 17:19 GMT September 18, 2009
jay,with reference to your "crosses" post from this morning, this can only mean more huge loses for gbpusd,right?
GVI Jay 10:34:26 GMT - 09/18/2009
Example 2: Today's market
Today started out with a bout of risk aversion. This saw eur/usd trade lower (although GBP was in the lead for other reasons) and eur/jpy trade lower as well as stocks traded a touch lower.
At 11:27 GMT news came out of Tokyo that Finance Minister Fujii had backtracked on the strong jpy comments he made earlier this week. EUR/USD, which had already comie off its low, spiked higher from 1.4675-80 to 1.4710 and USD/JPY traded a touch higher.
Catalyst: A spike higher in EUR/JPY from around 133.80-85 to 134.44 (see chart posted above).
So even if you were not trading eur/jpy, you needed to be aware that this was the catalyst for the eur/usd spike. EUR/USD has since steadied as eur/jpy did not follow through after the initial spike higher.
Be aware of what is moving the spot market.
GVI Jay 00:05:50 GMT - 09/18/2009
I started this thread to illustrate the importance of crosses in spot trading. Even if you don't trade crosses you need to be aware of moves in the major cross pairs that are associated with the spot currency you trade.
The reason I am starting this thread is becdause of the way eur/gbp helped drive gbp/usd lower and eur/gbp higher during a thin US afternoon session today. It is a good example to illustrate my point.
To be honest, I was trading the eur/usd and watching stocks as a guide given the correlation between the two but did not keep my usual keen eye on the crosses. I saw stocks tic up and eur/usd trade higher but it wasn't until I took a look at eur/gbp that I found the real catalyst. I realized then that euro demand was not coming vs. the USD but vs the GBP. Once eur/gbp met resistance and stalled, it was only then that upward pressure on the eur/usd eased and it acted logically by backing off. I included a eur/gbp (see above) 1 hour chart to show movements in this cross and how it moved sharply higher today (notice how it broke out to the upside after firmly taking out the .8933 area).
The point is without watching the crosses, trading spot can be like trading in a vacuum. The subject of how to use crosses to help in spot trading can be complex and the purpose of this post is just to highlight the importance. I will be glad to carry on this discussion so feel free to comment.
Note: This thread is not just for me to post but for anyone to post his/her comments, insights or questions. I am just getting it started and hope is it will take on a life of its own. For that to happen, we need others to contribute.
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