Expanding on what economist originally caught....

Stories that the Deposit Protection fund the central bank is using to back up its guarantee on accounts only has 4.4 million pounds are starting to cross the wires(check out the Bloomberg story). That shouldn't make anyone too confident. I'm not sure whether the HM Treasury ��can just print money to fill its coffers or have the government funnel funds into the fund. Anyone familiar with their monetary policy capabilities. Nonetheless, the government and BoE will certainly need to address this issue.

GBPUSD - 53% of retail traders are long GBPUSD (long to short ratio is 1.12). . Last week, the ratio was at -1.03 as 51% of open positions were shortMoreover, since last week, retail has been aggressively buying GBPUSD (long positions are up by 13.1%). In the past, when retail was long and buying more, the GBPUSD has sold off in the following days. The SSI gives us a STRONG SIGNAL TO SELL GBPUSD.

Source: FXCM Dealing Desk

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

It looks as though we are all looking at much the same pattern. I've looked at the chart for much of the evening and taken a short at just under today's high at 2.0203 which is last weeks close. Above there is the t'line taken from Jul 25th - Sept 12th highs which smartly cut off the rally on the 24th inst. This may appear optimistic but I feel a run down to 1.9808 is fair game. Levels I'm watching are:

2.0406 weekly close (some time back)
2.0366 Sept. 12th high
2.0318 Sept. 24th high
2.0286 Weekly close 7th
2.0201 Weekly open 14th
2.0073 Weekly close 21st

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Hi Traders,

Now we are trading two currencies in troubles (GBP & USD). Range trading is the best option for me. EURGBP is trying to consolidate a break above 0.70, giving us some support in a bearish scenario for GBPUSD.

For now we are still trading in range using 1 hour chart, waiting for triangle breakout.

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What chart package is that you are using?... looks good.

viva

It's part of the trading platform I use. It's much the same as the FXCM charts, in fact FXCM's offering have more going for them!

Looks like Cable has dropped out of the congestion zone after back-filling the move early Sunday. A strong move could see 2.007 come under pressure next but almost certainly it looks like the range sits nicely within last weeks close at 2.0201 and the previous weeks close at 2.007.

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Looks to me the bulltrend's still intact untill 20060's breached.
Followed my plan and longed 20135, could be wrong so stop in place.

did you get stopped out? or did you manage to ride the wave up? i longed at 2.0110 and that spike caught me by surprise!.. a nice one tho.. got out at 2.0160

viva

Yes the rally surprised me too. FLASH: No Bids Received For GBP 10Bln 3-Mth Tender - BoE

Not yet, my stops are usually pretty wide for position trades.

Nice scalp trade of you.

The ratio of long to short positions in the GBPUSD stands at 1.04 as nearly 51% of traders are long. Yesterday, the ratio was at -1.13 as 53% of open positions were short. In detail, long positions are 18.3% higher than yesterday and 12.2% stronger since last week. Short positions are 1.0% higher than yesterday and 4.6% stronger since last week. Open interest is 9.1% stronger than yesterday and 7.4% below its monthly average. The SSI is a contrarian indicator and signals more GBPUSD losses.

Source: FXCM Dealing Desk

For historical data and charts based on the SSI please visit http://www.dailyfx.com/story/strateg...299642258.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

I'm watching Cable for a move below 2.01, as it would signify a break down from the short-term channel formation and the 50% fib of 1.9879 - 2.0322. While the long-term trend remains bullish, I think we could see a test of trendline support at 1.9916.

On a fundamental note, while I think the Northern Rock stuff has been one of the primary reasons GBP took such a big hit previously, it's worth remembering that when there's one cockroach, there's usually many more that haven't been discovered yet. With a liquidity crisis looming, if/when these other companies show signs of distress, the impact could be quite severe for not only the UK equity markets, but GBP as well which greatly limits its bullish potential.

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The GBP positioning flipped to positive. This is a fairly strong sell signal. Let's see if it stays this way.

Maybe Im missing something here, but I dont get why Jamie is calling a bullish set up? and to 2.04-2.05?

Apart from the occasional $ fundi derailment, the GBP fundis seem to be lining up bearish, and we have been discussing the technical bearish points...

SSI is getting bearish, COT is getting bearish,

I have read and re-read his post, but I dont see it! (sorry Jamie)

Does anybody else see it?

viva