In For A Penny, In For A Pound

GBPUSD:

After briefly touching $1.64 to start out the year, the Pound's come under pressure the past few weeks as a batch of poor economic data has sparked rumors of continued and perhaps increased easing:

This sharp sell off has brought back into play support at the bottom of the 4 year triangle we've often spoken about:

This pair is getting close to the apex of the triangle now and we'd have preferred to see a breakout at one of the prior contact points.  Triangles should resolve before this and not press so close to the apex.  That said, we started a small long position yesterday to see if the support holds again and will watch closely for now...

EURGBP

As with the weakness against the US Dollar, the Pound has also given ground to the Euro and that pair has risen right back to the top of a multi year channel and near resistance:

We've also started a [small] short position in $EURGBP to see if the overhead resistance holds.


At this point, both trades are purely technical and speculative; we'll sit tight for a while, watching them and trying not to over think the trade...


Disclosures:
long GBPUSD, short EURGBP

____________________________ 
The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor.  All data/market/price information is believed to be from reliable sources.  Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.   

Sterling's Gold

GBPUSD daily:

Over the past few weeks $1.58 has been formidable resistance for GBPUSD, but with each retest the odds of a breakout increase:

Should the pair break above 1.58, we'd expect mid 1.60s in short order, which would bring into question the multi-year triangle we've spoken about often:



GBPUSD weekly:

If we were forced to guess, our bias would be that we eventually retest the top of the multi-year range (about $1.65ish). What will be more interesting is what shall happen when either $1.65ish to the upside or $1.54ish to the downside is broken, completing the almost 4 year triangle.  We'll not wager that far out for now, but to quote Sterling:

"I know cooler heads should prevail, but am I the only one who wants to see this?"










In the short run we are playing the pair via a long position against the Aussie dollar.

GBPAUD daily:

We traded this pair from the short side and caught about 1/2 of the large move down from May, but took our profits too soon.

We're now playing from the long side and will just trail a stop (currently at break-even at 1.4785) should the pair start to run as it did from March to May of this year.  While we never expect to catch 100% of a big move, we left way too much on the table with our short side trade this summer and don't intend to let that happen again should we be fortunate enough to be at the start of a large move...


Disclosures:
long GBPAUD

____________________________ 
The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor.  All data/market/price information is believed to be from reliable sources.  Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.  

$EURUSD views

Three quick views of the Euro/Dollar pair on different timelines...

EUR.USD daily:

On the daily chart the pair might be putting in a small inverse head and shoulders, with a neckline above 1.23ish:

While we have less confidence in this little H&S than we did a few months ago with the always scary Thriller Head & Shoulders in this pair (original post here), should this be broken we could see the pair trading back up to a 1.27-1.28 range.  It almost feels like we need a sharp rally to shake loose the weak bears and get the uber-bulls all excited again before a larger move down can occur.

EUR.USD weekly:

On the weekly chart the channel is pretty clear and the pair has bounced around as we've gone from bad sPain headlines to random EU comments that they'll "do whatever to save the common currency:"

We would probably look to sell a rally back to the 1.27-1.28 area, keeping in mind the bigger picture...

EUR.USD monthly:

On the monthly chart the picture has been clear for over two years now as the large channel has held:

Our bias from the start was that this current leg in the Eurozone debt crisis would take the pair down to the 1.10 to 1.15 range.  Fundamentally, in the US QE is temporarily off the table - which will help the US$ while Draghi will be forced to crank up the printed presses if he wants to keep Spanish yields below 7%.

As such, after closing out our long held short position a couple of weeks ago we're looking for any temporary relief rally back to the 1.27-1.28 area to establish a new short position for the next leg down.

Disclosures:
no position in EURUSD at the time of writing

____________________________ 
The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor.  All data/market/price information is believed to be from reliable sources.  Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.