FXstreet.com

Technical analysis: Short Sterling

0

0

Short Sterling – March 2009

Wed, Oct 1 2008, 11:01 GMT
by Nicole Elliott

Mizuho Corporate Bank


Comment: Short Sterling futures contracts should hold below 95.500 for another month or more. Front contracts will remain under tremendous pressure ensuring calendar spreads trade around their most inverted ever. The interbank market is dysfunctional with three-month Libor at 6.32% today after overnight money dropped to 1.00% yesterday afternoon. Overnight US dollars yesterday were offered at 10.00% yesterday morning and 1.00% late in the day; it is impossible to run a serious business this way. The rush into short-dated Gilts is understandable although the sudden steepening of the yield curve has taken us by surprise. Last week’s rally in this futures contract extended beyond what we had allowed for, but it appears to be forming a ‘double top’ against 95.190. We still see it as a selling opportunity for another drop later in Q4, to 94.500, maybe 94.200 and probably no lower than 93.700.


Strategy: Sell at 95.000; stop above 95.250. Add to shorts on a daily close below 94.900 to cover half of shorts at 94.500 and the other half at 94.200. Then watch for signs of a dramatic low between here and 93.750.

Archive

Mizuho Corporate Bank  | 1-3-3, Marunouchi, Chiyoda-ku, Tokyo 100-8210
http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk

Legal disclaimer and risk disclosure

The information contained in this page is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This page has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.

Related reports

Daily Forex Overview by Dukascopy Swiss FX Group
Fri, Nov 6 2009, 08:50 GMT

Daily World Market Update - Bank of England Opt For A Swift Half by World First UK Ltd
Fri, Nov 6 2009, 08:35 GMT

Daily U.S. Forex Summary - The Japanese yen weakened against the dollar overnight by Union Bank of California
Thu, Nov 5 2009, 05:41 GMT

Fundamental Currencies Comments - Technical movements amid an absence of fundamentals by ecPulse.com
Tue, Nov 3 2009, 07:03 GMT

Fundamental Currencies Comments - Majors started this week with a correctional move by ecPulse.com
Mon, Nov 2 2009, 06:47 GMT

gbp

View All

Related content

UK's Total Value Fell GBP177 Bln To GBP6.95 Tln In 2008
Dow Jones | Mon, Aug 3 2009, 08:54 GMT

UK Brown Wants G20 Agreement On New IMF Funding Facility
Dow Jones | Wed, Mar 25 2009, 14:34 GMT

GBP/USD: The Pound, rejected by 1.4135 returns towards 1.3990
FXstreet.com | Tue, Mar 3 2009, 15:03 GMT

GBP/USD: The Pound drops back to the 1.4050/60 support level
FXstreet.com | Tue, Mar 3 2009, 11:08 GMT

GBP/USD: The Pound turns up on 1.4150; 1.4220 on sight
FXstreet.com | Fri, Feb 27 2009, 09:40 GMT

gbp

View All

Interested in forex trading? forex brokerage firms!


FX Solutions LLC
Contact the broker/FDM
Open a demo account
FOREX.com
Contact the broker/FDM
Open a demo account
MIG INVESTMENTS SA
Contact the broker/FDM
Open a demo account
City Credit Capital (UK) Limited
Contact the broker/FDM
Open a demo account
FXDD
Contact the broker/FDM
Open a demo account

GET CASH BACK FOR YOUR TRADES!   Learn more about the Pip Rebate Program

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

©2009 "FXstreet.com. The Forex Market" All Rights Reserved.