All About the Gbp
Hi, this week there is no scheduled “red flag” news. There is also the wind down to the Christmas holidays when traditionally most of the big traders will be away from the markets until the New Year. Under normal circumstances that would signify a very slow week with very little movement.
FMP Christmas Holiday Plans:
I am not trading until the New Year. Over the holiday period, I recommend that you focus on education and planning for the year ahead.
Over the holiday period, I will share a new section in the Education area on the subject of investing in cryptocurrencies.
Beta testers from my crypto investing website have seen some coins in their portfolios grow by over 180% since May and those who joined after my webinar on the 28th October have seen Bitcoin go up over 80% and one of my other top 3 coins, tripled in a matter of weeks!
I am convinced that is just the start of a very bullish run on Bitcoin and many other of the smaller coins and tokens with potential life-changing gains to be made if folks know what they are doing and get in soon.
I will host another special webinar on Tuesday 29th December at 11.00 am London time on the subject of why I am invested in Bitcoin and have a portfolio that includes around 20 smaller coins that I believe at least a few could “shoot to the moon.”
This will be an update of the webinar I hosted on the 28th October. Those who joined me then have seen massive gains already and I believe that this is just the start.
That is Tuesday the 29th December at 11.00am London Time.
At the end of the presentation, I will answer as many questions as possible from attendees, so I recommend you attend if you can.
If you would like to know more about my new Crypto Investing service you can check it out here: CLICK HERE
Forex. I mentioned earlier that Under normal circumstances that Christmas is a very slow period with very little movement. One thing is for sure there has been NOTHING that could be classed as “normal” in 2020 and the danger is that the year could still end with yet more chaos.
There is the everpresent danger of Trump & much talk of a new strain of COVID in the Uk & Africa. In the UK London, the South East in General, Scotland & Wales are all back in total lockdown.
Last but not least, of course, is the “B” word 🙂
If a Brexit deal is announced over the weekend then there is a likelihood of a gap (possibly a very big one at the market open). We saw that happen last week when there was a big one (+100 pips) on the Gbp/$.
All About the Gbp
Why Gaps & What is the Problem?
As the forex markets close from Friday night then any surprise news over the weekend means that price can and often does jump higher. This is why it’s risky even under normal circumstances, to leave trades open over the weekend.
I only do it if I have at least 80 pips profit and I am trading a pair that is fairly stable. That does not apply here.
An example of the effect: The problem for traders is that if you have a stop of 40 pips above the current price which means if your trade loses, you lose $100. However if price gaps by 100 pips, now you have just lost $250.
If there is a positive Brexit result then this gap has the potential to be even bigger.
Occasionally gaps occur when the markets are open. This could happen here if the decision is announced after the markets re-open.
Therefore, its too late now if you are already in a trade BUT for the next 2 weekends to come, do not under any circumstances leave trades open until the holidays are over.
The Forex Week Ahead.
There may be some opportunities over the next couple of days which I show below but As I explained earlier most of the big traders will be absent and I have seen many Christmas periods when price has hardly moved. Therefore its more sensible to leave things alone.
If you ignore my advice and decide to trade then the 4 hour charts may well be best. DOn’t be greedy and reduce the risk.
All Gbp pairs are impossible to predict.
I would not go near any of them.
Last week the Gbp versus the $ was up over 2% mainly due to the ongoing “hopeful comments” from both sides.
I have said all along that I expect a “fudge” deal.
One where neither side gets what they want but they come up with something they can sell to their compatriots as being a victory.
The EU is notorious for doing deals at the last minute and Johnson is certainly playing “hard ball” but he has backed himself into a corner over fishing rights. He can not be seen to back down over it, so I expect them to come up with some kind of “kick the can down the road” fishing deal.
If they do not and there is no deal then its a 100% certainty that the French will blockade the channel ports which could make the UK supply chain even more precarious. A no-deal any time before the 31st will probably see the Gbp tank and 1.2500 and even 1.2000 are not beyond belief if the reaction is extreme.
Last week I explained that if markets are slow then go down to a 4 hour chart and look at the structure and where the areas of support and resistance are. Once again there are some pairs that look tricky on weekly and daily, but are possibles on the 4 hour- see the video.
Aud/Nzd: This pair can often be very slow – Its in a 300 pip daily down channel. 106.80 is the area to consider with my stop above the 55ema and whole number.
Euro/Aud seems unlikely now but a short at 1.6390 is the sweet spot for me once more.
€uro/$: I am leaving alone but If you feel that you “must” trade it then 1.2000 is a key area to look at on a 4 hour chart, but not for me. If the Brexit deal falls through this could tank.
Chf: 0.9000 was huge support for a long time, so that should now become resistance so a short is an option. Watch it on a 4 hour chart around 8930 as there are some reasons for the stop there BUT if the€ tanks then this could shoot up!
Euro/Gbp: Brexit you are gambling not trading if you go near this!
Gbp/$: I would leave it alone as it is gambling but the whole numbers are big areas if it drops. The problem is that an overreaction to negative news is quite likely and this could drop a whole lot further, this could drop to 1.2000 so I would not touch it! If there is a positive, conclusive Brexit deal (those pesky French could still scupper it in the EU parliament) then 1.4000 is a possible target.
$/Yen: on a 4 hour 104.00 & 104.50 on a 4 hour to short. I only want to short. 105.90 is the “A” grade but it probably will not get there.
Cad: My bias is to short and 1.3000 is the key area, I will place my entry at 1.2990 and the stop at 1.3040.
Nzd: Stopped at the monthly 200ema as expected. I prefer a pullback to long at 0.6820 for multiple reasons.
Aud: 0.7350 is the first big area to consider a long. If it does a big drop then a long at 0.7010 is the place. 4 hour traders watch 0.7420/50
Aud/Yen: 75.00 to long. I am not interested in a short now as its still stuck between 2 big emas in a small range.
Euro/Yen 124.60 to 125.00 to long. 127.80 short.
Cad/Yen 80.00 is a long and 82.50 for a swing trade short.
All About the Gbp
M3 Shorter timeframes
See the new course & recent blog posts as to how I do this: I do my analysis on daily and weekly charts first and make a note of the MAJOR areas of support and resistance. Then copy them on to Pierre’s Earth and sky template. Then I make a note of the weekly & monthly pivots points and add them to the charts.
You will see lots of opportunities line up during the week. The important thing then is to select a bias for the next few days and do NOT take trades if the price is too near a trend line or pivot. Ideally, you want to buy when the price is near a major support and or pivot point line and has the potential to make at least 40 pips. Vice versa for a short.
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
For more up to the minute, updates do not forget to drop by the forum.
Watch the video for more detailed explanations of this week’s analysis and trade plan.
Remember, for all the reasons explained above you are best advised to not trade this week. If you do then definitely stop by Wednesday.
If you would like to learn how to trade like a professional check out our 5* rated forex mentor program, RISK FREE; by clicking on the “Get Started Today” Button below