Ashraf reiterates his bearish case for GBP and bullish stance for EUR, discussed in his Premium Insights on January 16. He points out the UK's inability to boost growth via austerity and rising probability of renewed QE by the BoE.
Ashraf also talks about the firming support for gold and he confluence between key moving averages and 5--year trendline. Upside seen sufficient to produce 1730-50 before momentum reaches a new juncture.
From the Jan 16 Premium Insights on GBPUSD:
"The divergence between GBPUSD and EURUSD is reflected in our ongoing bullishness in EURGBP, which started back in October. Although the June trendine support remains intact, we anticipate a break of the support to extend towards the 100WMA (1.5960). This requires a decline under 1.60, which would be the first since late November. The negative convergence between the weekly and monthly charts highlights the medium term negative outlook for the pair. We will be targeting initial support at 1.5960, followed by 1.5910, which is just above the 55-WMA and 200-WMA of 1.5870 and 1.5840 respectively."
To subscribe to AshrafLaidi.com's Premium Insights on FX, gold, silver and oil, please click here:
Friday's post showing a possible top in US 10 year yields goes in line with the 10-2 charts. The left-hand chart shows the deterioration in the 10-2 spread, reflecting further flattening in the yield curve. This is usually a sign of the bond market challenging the Fed's rate hike expectations. Retail traders are often advised to NOT to fight the Fed, but this does NOT APPLY for the bond market, which often fights/challenges the Fed and wins. See full explanation inside the charts.