Hi, i too had 4 long positions that took the hit. so does the ew and matrix indicate that 1.69 is the lowest point before mid-sept? FXCM's Jamie in his ew charting projects that the pound is close to a correction if not a downright reversal.

Pound follows Fibonacci number in the price difference betwen major highs and major lows. You can try to look at the weekly chart and draw some lines from major high and lows in the past several years, and calculate the difference between the price in cents, and you'll see the symmetry I am talking about.

There are two Fibonacci number sequence that Pound follows, the original Fibonacci number and the twin Fibonacci number

Original Fibonacci sequence: 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, etc
Twin Fibonacci number: 4, 6, 10, 16, 26, 42, 68, 110, 178, 288, 466, etc

The major high was on Nov 2007 at 2.11. Pound dropped hard and stopped for a while and had a minute correction at 1.85 (ITD 6 on Aug 2008).
Difference: 2.11 - 1.85 = 26 cents, the twin Fibonacci number.

Later 1.85 broke, next target fibonacci number is 34, which gives 1.77 as an important level (2.11 - 0.34 = 1.77).

1.77 also broke, the next target will likely be another twin fibonacci number 42, which gives 1.69 as the target (2.11 - 0.42).

If this breaks as well, then next target is 55 number, which gives 1.56 (2.11 - 0.55), and so on.

By the way, look at CodyB previous post about the history of Pound fall. The number is similar.

Something else to think about:

Current GBP interest is 5%
Current US interest is 2%
At major high, this gives us 2.11 exchange rate before the meltdown.

Credit Suisse forecasts a 100 bps GBP rate cut in the next 12 months. If this is true, that gives GBP interest rate to be 4%. You can try to do this calculation. If 5% GBP interest and 2% US interest gives 2.11 exchange rate, what would a 4% GBP interest and 2% US interest exchange rate be?

I think it will rise to 1.7690/1.7705 before another leg down.

This figure is .50 ret and APF's upper channel top

Or may be only to 1.7660 which is .382 ret.

Any comments?

Regards
-PE

yes, and the EUR/GBP tends to reach 1:1... isn't?

A.

By the way, the answer to that previous interest rate calculation is 1.689

Maybe EUR/GBP can reach parity when they are both 1.22, LOL.

[quote=cmellon;184447]By the way, the answer to that previous interest rate calculation is 1.689

yes Cmellon... I got 1.688... and I guess parity will be reached around 1.50/1.60 in coming years... who knows... for now, I am shorting Cable every time I can.

This week I am testing a new set-up for my trigger... this is why I have made only few trades... I am waiting for 7650 zone... to take a short if possible.

best,

A.

I remember when the pound just several weeks back that many were projecting that after it had reach 2.150, that 2.3 and 2.4 was attainable in a few days. But it never did. The pound had mostly positive news this week except for decline in mortgage approvals while the dollar has mostly negative news except for the non-mfg PMI but the the pound still went down another 200 pips yesterday. CMellon, Credit Suisse gave a high probability that the BOC would cut its rate by 25 pts and another in the near future, but that didn't happen and the BOC minutes did not see any such rate cut happening in the coming months. If we give the bank credence and inspite of all those mostly GBP positive news (including the non-realization of a BOE rate cut which some analysts thought was possible), then I believe that we have seen the bottom hit in this morning's early Asian trade . The US employment figures are expected to disappoint, and we will see the dollar depreciate and the pound will be on its way to what you have forecasted re your ew and matrix charts. But may be I am just an optimist and a strong believer in ew, mm and the delta counts. As fxcm's Jaime points out in his fundamental analyses, when there is a reversal there is a tendency to overshoot bottoms or tops. In this case, the 7770 was overshot by more than 200 pips but I think your interpretation and general timetable remains valid (one cent worth from someone who barely understands the arcane delta counts). I remember JohnG predicting that the pound would hit 9400 in 3-4 weeks and it did. I wish he was around to weigh-in and share his expertise on matrix and delta, as you have selfless provided this forum. I keep looking forward to your valued contributions.

We need a very strong proof of a huge bullish hammer candlestick closing, followed by another bullish candlestick closing again the next day, before I can entertain the idea that ITD 8 is in.

LTD (Long Term Delta) and SLTD (Super Long Term Delta) direction is down, and Delta rule allows ITD (Intermediate Term Delta) low to come later than usual.

Even when we do get a bounce to ITD 9, we still have ITD 10 low due sometimes in mid Sept - third week of Sept, which can potentially go lower than ITD 8 low.

In my ITD chart, ITD 8 on average is due on Sep 2. There's a plus minus 2-3 days usually for ITD. Today is already Sep 5. Perhaps today is ITD 8 day, but who knows.

Take profit early for half lot, and move SL to breakeven quickly for other lots if you'd like to catch the bottom. Dollar is in steroid right now. Something "BIG" has to happen before market psychology can change. Right now the train is moving very fast, so make sure we don't stand in front of it.

Hi Cmellon, if ITD 8 is due around this time and ITD 10 around mid-sep/3rd week, when would you expect ITD 9, and what wud be the minimum projection from ITD 8 low, wud be 38% Fib min, from (31/7)high to (5/9)low??

short at 17620 tp 17537 sl 17650

hi etarkum, did you get to see my chart before? i don't want to post too long since if I post charts too much, I can't post anymore (there's quota).

looks like cable is forming a rising wedge on the 1hr chart. Possible 100 pip move on break. Will continue to watch 1.7595lvl with any entry having a tight stop at 1.7630 as payroll numbers could make things volatile.

edit

short 1.7592 s/l1.7630

Latest drop was due to EUR/GBP.
It looks like EUR/GBP may be forming wave 5 to 0.8250.

I have Sell limit orders at 1.7660 and 1.7700

There's another possibility that I overlook.

Nov 2007 high 2.11 to Jul 2008 high 2.01 is 10... twin fibonacci number
Jul 2008 high 2.01 to current price 1.75 is 26... also twin fibonacci number

There's a possibility that it's complete as currently it's symmetrical.
Coupled with Delta ITD 8 which is supposed to be due soon, it could be possible to get some reversal.

I am sitting aside though as I want to confirm where price ends first. If we can get a rally today over 78679 and close above it, then maybe today is the reversal day.