The pound had another bear day due to Carney rate cut announcement. Mark Joseph Carney, the Governor of the BoE, told the markets that a monetary policy stimulus is likely needed over the summer. So far, the Pound can’t catch a break and has even failed to close the Sunday gap for GBP/USD. Any shorts were killed off by a steep drop and price visited the low’s made by the Brexit vote. Boris Johnson also said he was not running for PM which leaves Theresa May as a likely candidate. She is very adamant on leaving the EU zone and disagrees on a 2nd referendum which gives pound bulls no hope.
I took advantage of Carney’s rate cut announcement and shorted the GBP/USD and GBP/JPY. I wasn’t too aggressive due to weird volatility when the pound found supports pretty early on. Regardless, the dovish statement drove the GBP/USD over 200 pips below and it looks like it has a potential to make lower lows from the Brexit vote. Perhaps George Soros was right when he said the pound would see a 20% loss.
All eyes on Boris Johnson and Theresa May as they are the potential candidates for Britain’s new Prime Minister. One of them needs to declare a Conservative leadership to get things in order. As of now, nothing is set on stone but the deadline’s tomorrow at noon. Things can go anyway for the pound, if they are set to leave the EU we’ll see further down movement, if not, this bounce will go even higher.
I was too greedy on the long GBP/USD trade. Overnight it gained 130+ pips, but I went to add in more longs which ended on a bad note. I didn’t want to hold since tomorrow can be a game changer for the markets. For now I’m focused on the news to see Britain’s new steps.
We saw the first recovery in the markets since the Brexit catastrophe. There were protests in the UK with people shouting “EU we love you!” and “We are European!”. Rumors are flying that the Article 50, the article that’s needed to be triggered to officially leave the EU, is going to take a bit of time, or even not signed at all. Equities had a good rally while the Vix eased up a bit. Some people are calling this a bottom and others are calling a sucker’s rally.
I’m cautiously optimistic for now. It looks like the markets may have overreacted from the Brexit and perhaps Brexit may not even happen for a while. I decided to take a long GBP/USD trade and hold for a bounce. There’s some relief rally going on so I’ll try to ride the momentum and escape if it’s a bull trap.
Bregret is the feeling Britain feels at the moment. The people who voted for the Brexit are questioning if they made a right decision. The global market altogether lost a record of $2.1 trillion dollars. There are even petitions out to have another vote but Carney made it clear that the decision is final. Yellen decided to pullout of the Summits meeting, probably busy having a meeting with the other Fed members. The Brexit definitely had a huge impact on the Fed’s decision on their rate hike. The contagion effect will probably continue further.
Although GBP/USD and EUR/USD made new lows, over Sunday’s opening I decided not to trade. I was definitely tempted but after seeing some retracements on Friday, I wasn’t sure where the market was deciding to go. Today’s session was rather calm so I decided to play things safe. I did some quick USD/CAD long scalps as oil was falling and waited for some majors move that never came. Sure the GBP/USD and EUR/USD looks great to pick bottom but I’m staying betting that they will make lower lows. Remember, bottom picking is a smelly business.
The Brexit vote came out ahead and the citizens of UK voted on leaving the EU! This was truly an amazing experience to see the markets as different sections came out with a “remain” or “leave” lead; it was like the superbowls between the two parties: In and Out. Markets were going crazy and eventually the Pound collapsed due to an unexpected win by the leave group. The aftermath of this vote was incredible, the GBP/USD not only made 2016 highs but also 2016 lows on the SAME DAY! Equities went nuts, Gold exploded to the up side, and the GBP/USD went to make 31-year lows. Britain’s Prime Minister, David Cameron, also made his speech to step down the office in October due to disagreement with the Brexit vote. The whole event was a truly historic moment I’ll never forget.
I couldn’t really trade mid Brexit votes due to high spreads and wicked volatility. However, I did manage to ride the Pound and Euro short momentum when it looked like Brexit was final. I had a spectacular trading day up until this morning for NY session. I was really expecting the EUR/USD and GBP/USD to make new lows from yesterday’s catastrophe. Instead, NY session was forgiving to the pair, which I think was due to global central banks attempting to save the poor Euro and Pound. I couldn’t catch the short EUR/USD and GBP/USD but that’s okay. All in all, I’m perfectly fine with today’s losses and I’m prepared to trade the new week with caution since there is a new paradigm shift in the markets. 2016 is truly a historic year.
This is what happened in the markets when NY opened after Brexit. You can see safe havens such a metals, bonds, USD and JPY positive while everything else is bright red.
It’s night time in London and votes are slowly coming in from 382 different regions. What a monumental day considering it’s my 1 year anniversary for this blog! Back to the Brexit news, the markets are going crazy. The pound had a killer rally during NY in allude to a strong remain vote to win, however, once NY closed and live votes started to come in with a leave lead, the pound quickly gave up those gains. It’s still very early with the voting but as of now, the leave vote is surprising leading. It’s surprising to see the underdog, leave, vote to lead so early but in the end of the day, it’s the total count of votes that matter.
I had a terrible start of the day when my long USD/JPY got stopped out early before it’s rally. Shaking off the loss, I was able to quickly scalp long GBP/JPY and also long USD/JPY. Hedge funds and financial investors were betting on the remain vote to win and I decided to follow the momentum. As of now, the votes are still very close but the leave side is continuing to lead. It’s a very interesting night indeed and I’ll probably end up doing an all-nighter. Cheers to day 365, I’m proud of surviving this long and I hope to continue this blog for a while.
Tomorrow is the big day for the EU membership vote by the UK! The markets have been anxiously waiting while numerous polls and surveys have been conducted. Depending on which polls you look at, the majority of the votes look like remain is leading slightly. If we also look at the bookies, there are more money positioned into a Bremain as well. Analysts are saying how a Brexit will have an asymmetric affect in that if the leaving vote wins, the economy will wreak havoc while a remain vote will most likely keep things the same. I’m leaning towards a Bremain and expect the Brexit no vote to win. We’ll find out tomorrow.
My starting morning wasn’t too bad, I was positive until late afternoon due to some late session volatility. Unfortunately, just when the euro and pound looked like it’ll fall off a cliff, it had a evening reversal. Multiple polls were being released and some stated that a Brexit vote was leading. I was hoping it would’ve pushed the GBP/USD further down but that didn’t end up happening. For my Brexit trade I will be holding a USD/JPY long in the hopes that Britain stays and the Yen gives back it’s gains due to panic buying. USD/JPY needs to break to the 105’s and hopefully stay up there.
The GBP/USD revisited last May’s high of 1.46800’s. Draghi also took down the EUR/USD be restating that there are more stimulus to come if needed. Yellen spoke as well but didn’t make new news which didn’t affect the markets drastically. Dollar did eventually end on a rally by end of NY session.
I took this opportunity to short GBP/USD at resistance because there wasn’t any fundamental reasons behind this rally to break structure. With Brexit only 2 days away, markets will probably be very volatile and wild. The remain vote is up, however, the leave vote is still slowly catching up. This week will end on a very interesting note.
Markets were wild today due to Brexit. The yen got heavily bought while dollar still looked unwanted by the wary investors. Other than some random jerky movements, price action in the market stayed rather quite. To sum it all up, it felt like a boring Monday.
FXCM charges a $10 fee for accounts lower than $1,500. So although I was positive for the day, I had to pay my broker for my fees. I would deposit money to match the $1,500 requirement but I’m setting my goal to gain it through my trades. As Yen is being heavily bought, I’m going to look for future potential long USD/JPY opportunities when Brexit worries fades. Here’s the weird movement in the GBP/USD today.
Pound’s strength continued from yesterday through today’s session. Dollar has been struggling to make highs while the euro and pound recovered some their losses from Brexit fears. It’s no surprise to see the quick bounce from the GBP/USD as it hit a major monthly support. This was probably where all the investors who anticipated the Brexit vote to lose took their entries.
I had some losses trying to long the USD/JPY and short the GBP/USD. I didn’t anticipate the GBP/USD to rocket so high without a pullback. It wasn’t the smartest decision to pick tops but at the same time, the pound is behaving so wild right now. Here’s the support the GBP/USD hit.