Forex rebates on every trade - win or lose!

You're right imo in what you say, Foxey, great in hindsight but useless in real time.

I prefer my Up and Down StrategyTM. Buy it 'cause it's going up and sell it 'cause it's going down. And if it turns just after you've entered the market, cut your loss and reverse it quick.

Sterling is having another good day as stops are triggered on the break below 0.7850, just after Bavaria confirms the large fall in German inflation. Support is now seen at 0.7825 and then the key 0.7804 level which is the seven month channel base. Cable meanwhile looks to 1.9975, but may struggle as chatter concentrates on a 1.5600 Eur/usd option expiry this afternoon. It now looks like the Cable buying is rellated to a UK clearer buying on the hour, every hour (for now) for their dividend payment.

Do you run a course on your "Up and Down Strategy"? :-) Sure you could charge a fortune!

Perhaps won't come into play but I seem to have down slopey resistance and also a Fib level on Cable at 20004.

15:21 GMT, Apr 28 2008 | Posted by Mark Mitchell from London
Cable goes the way of Eur/usd


Cable again enjoying some buying on the hour mark which suggests that there was further sterling purchases by the UK clearer. Resistance now comes in at 1.9975 and 2.0025. Tomorrow should give us a bit more event risk than today as the MPC's King and Blanchflower testify before the Treasury select committee. Obviously superdove Blanchflower will tell us we're all going to hell in a handcart, so King may feel he should be a bit more hawkish than normal just to balance things out a little.

Hils,

Wonderful.........when will you be publishing phrase book!

Disregard my last comments, those levels are from an IG chart - yuk!

Errrrrrrrr. I keep reading articles about tonight's FOMC announcement, but all of the calendars point to it being tomorrow night.

Someone's clearly wrong.

This doesn't seem to be on the calendar, but it's important nonetheless.

Mervyn King set to face scrutiny


Mervyn King's reappointment will be discussed



When Mervyn King appears before the Treasury Select Committee later, it will be the first public opportunity to discuss the 50bn-plus loan scheme for British banks which he unveiled on 21 April.

The members of the committee are keen to grill him on the details of the scheme, which is the Bank of England's most ambitious effort to date to ease the credit crunch.

In particular, they are likely to want to be reassured about the risks for the taxpayer of allowing banks to exchange their mortgage-based assets for safe government bonds for up to three years.

Reappointment?

Mr King has said that the scheme should reassure the markets that no bank will be allowed to fail simply as a result of a shortage of liquid cash.

But Libor - the inter-bank lending rate at which banks lend to each other - so far remain stubbornly high.

MPs may want to probe the governor on how he interprets the market reaction to the scheme, and what would be his own measure of the plan's success.

Though the committee will take it as an opportunity to discuss general financial and economic conditions, the formal subject of the hearing is Mr King's reappointment for a second five-year term as governor at the Bank.

Before last summer, another term was considered to be Mr King's for the asking.


Critics said the Bank of England should have acted sooner to calm markets



But with the onset of the credit crunch, he came under increasing criticism for his response, which came to a head in the handling of Northern Rock.

His critics said the crisis could have been avoided if the Bank of England had acted sooner to ease the strains in the London money markets.

Mr King's drubbing by the media through the autumn of 2007 put his second term as governor in doubt.

The government heightened the speculation by refusing to comment on his reappointment until it was announced at the end of January.

Popular choice


But his standing in the markets has risen in recent months, especially since the launch of the new loan facility.

Defenders of Mr King's handling of the crisis point out that money market strains - at least until recently - have been equally evident in the US and the eurozone, despite the greater perceived activism of the US and European central banks.

They also note that the Bank of England has quietly injected as much additional liquidity into the markets as these other central banks, if not more, since the crisis began.

Mr King is a distinguished academic economist, who was a professor at the London School of Economics before becoming the Bank of England's chief economist in 1991.

He was deputy governor of the Bank from 1998 until 2003 when he succeeded Eddie George as governor.

He was a popular choice for governor in the media, having built a rapport with economic journalists while presenting the contents of the Bank's Quarterly Inflation Report at well-attended press conferences.

He has led these press conferences since the report was launched in 1993, and as a dedicated Aston Villa fan, will often pepper his remarks with elaborate football analogies.

Moral hazard

However, even before last summer senior city figures had complained about the governor's failure to forge closer links with the London financial community, a failure which may have cost him crucial support in the dog days of August.

The economy has cooled in recent months



Many said Mr King's focus on "moral hazard" during that early period - the risk that special support for banks now would reward banks who had made reckless decisions in the past - was a reflection of his overly 'academic' approach to the financial markets.

But outside the City, he won some support for trying to make sure that banks have an incentive to be more cautious in the future.

As financial conditions have worsened, the Bank's emphasis on moral hazard has receded somewhat.

But the fact that the new liquidity scheme is designed to avoid transferring any risk from banks to the taxpayer is a reminder that the governor is still extremely resistant to offering the banks anything that resembles a free lunch.

Eur/Yen has more or less fallen through trendline support established March 19 this morning, although remains to be seen if the support is just 'pierced' (intra day reversal?) or firmly breached.

Good morning everybody. Just writing a report and could use a bit of help, please. Is there a free EUR/GBP interactive chart I could access and do a bit of support, resistance and trendlines on? Essentially I am hoping to see if there is a trend emerging for the next 1-3 months. Which would you see as being stronger and why, basically.

Thanks

King is pleased with the tighter lending standards in the mortgage market saying it would be a serious mistake to get mortgage market back to where it was a year ago. This obviously begs the question as to why the Bank of England failed to do anything about it at the time. On wages he says that he was surprised at how little they have responded to higher CPI, cannot be sure it will continue. Talking about inflation he sees inflation hitting 3 percent over the next 12 months and that the period when CPI will be around 3 percent is likely to be greater than previously thought. He also repeated his concern over the rise in inflation expectations. More to come.

P,

Look under "Interactive Calendar" in the thread header. There's a tab for charts in the DailyFX bit. Click on that and take your pick.

Alternatively, go to either ODL Securities or Alpari or InterbankFX websites and download a free copy of Metatrader 4.

Thanks, Hils.

That's your weekly chart, P. I would say it's still going up and the Germans are all still very hawkish. It's the latin countries who are struggling and are dovish but they really should know better than to stand in the way of Germans.

And they won't invade this time: they'll just stop propping up their economies.

Hilary, thank you. Currencies are not something I follow sufficiently regularly to claim any expertise, and your guidance has helped enormously.

( TF ) 04/29 20:17
BoE's Blanchflower dubs 50 billion pound rescue plan 'expensive' UPDATE


- (Updating with further comments)

LONDON (Thomson Financial) - The Bank of England's 50 billion pound plan to ease the liquidity drought is 'expensive', a rate-setter on the Bank said.

Referring to the 'haircut', or spread, charged by the BoE when giving banks government debt in exchange for mortgage debt, David Blanchflower said two things are clear:

'A: we give haircuts and B: boy, they're expensive'.

He said the success of the initiative will be seen by whether the London interbank lending rates fall in due course. The three-month Libor rate remains around 5.80 percent, well above both normal levels, and the Bank's base rate of 5.00 percent.

Earlier this month the BoE said it will allow UK banks to swap mortgage-backed assets for secure government bonds, charging 'haircuts' in that the assets swapped will have to be of much higher value than the liquid assets offered.

The comments came after a speech earlier on Tuesday, in which Blanchflower called for interest rate cuts sooner rather than later to stave off a recession in the United Kingdom.

Blanchflower said the pound could weaken further, with some saying the falling currency is supporting the economy.

He said BoE reports 'have suggested that a weakening of sterling has been welcomed, and perhaps a further weakening would also help.'

The pound has weakened against major currencies recently, falling to record low levels against the euro.

The rate-setter also dampened speculation of a rift on the Monetary Policy Committee. Minutes to the Committee's last meeting showed that while Blanchflower voted for a 50 basis point cut, the majority called for a less aggressive 25 BP cut, and two members voted to hold rates. This was only the second three-way split in the MPC's history.

Blanchflower said 'there was a spread of opinion ... but I guess what you should take from it was there was a majority in favour of a cut.'

( TF ) 04/30 07:00
UK house prices 1.0 pct lower than a year earlier - Nationwide


- LONDON (Thomson Financial) - UK house prices were 1.0 percent lower during April compared to a year earlier, the first year-on-year fall for 12 years, according to building society Nationwide.

Higher mortgage rates and tighter lending criteria meant buyers stayed away from the property market during April, causing the average house price to fall 1.1 percent from March to 178,555 pounds. This means the average price is now 1.0 percent or 1,759 pounds lower than a year earlier, the first time the annual growth rate has been in negative territory since March 1996.

Nationwide chief economist Fionnuala Earley said the fall in prices reflects the steep decline in mortgage approvals seen over the past six months.

'The fall in transactions has pushed up the stock of unsold property on the market and improved the bargaining power of buyers, thus pushing down on prices,' she said.

Yesterday, the Bank of England reported that mortgage approvals during March totaled just 64,000, the lowest level since records began.

Earley added that the fall in house prices is likely to spell trouble for the rest of the UK economy in the coming months.

'With house prices no longer rising, consumers are likely to become more cautious in their spending habits, contributing to a weakening of the overall economy,' she said.

Market Preview: U.S. Dollar Vulnerable to Dovish FOMC Statement, Strategists Say

18:53 04/29 (CEP News) With the U.S. Federal Reserve widely expected to cut short-term interest rates by a quarter-point on Wednesday, market participants will be closely scrutinizing what messages the accompanying statement sends about the future path of rates. Currency market strategists say the U.S. dollar may rally somewhat if the Fed indicates a pause or an end to rate cuts but that the dollar could fall sharply if the Fed maintains a dovish policy stance.

Fed fund futures are pricing in an 80% chance of a 25 basis point cut and a 20% chance of no move in the current 2.25% Fed fund rate. A month ago, the market was divided between a 25 or 50 basis point cut but more hawkish statements from voting members of the Federal Open Market Committee are believed to have erased the possibility of a half-point cut.

Camilla Sutton, currency strategist at Scotia Capital, said inflation concerns have been responsible for the shift in market sentiment. Along with a smaller rate cut, Sutton said markets widely expect the Fed to indicate a pause, or conclusion, of the rate cutting cycle.

The market has swung so far to the camp theyre cutting 25 and then going on pause, any kind of disappointment away from that and well see U.S. dollar weakness, Sutton said.

Sutton said the euro could rally to 1.5700 against the U.S. dollar if the FOMC statement doesnt signal a pause. The euro closed the day on Tuesday down 0.0094 to 1.5564 USD.

After hitting a record high of 1.6018 on April 22, the euro has weakened and Sutton said that it could fall another 1.5 cents if the Fed doesnt cut rates or indicates it might not cut at the next meeting.

Should they either not go at all or signal a pause, I think well see a big downward move in the euro from here ... It doesnt mean it will be the end of the cycle, they might still cut in September or August, but it would be a dollar positive, Sutton said.

If the Fed takes a more wait-and-see approach, the euro will dictate the currency pair, Sutton said. If its a little bit left up in the air, well see moderate U.S. dollar strength for awhile and then the focus will really shift to Europe.

The recent turnaround in equity markets and improvement in credit markets have led many to believe the Fed could but wrapping up rate cuts and that the U.S. dollar has bottomed out. The euro has gained 6.75% this year and 31.1% since the start of 2006 against the U.S. dollar.

A currency trader in Toronto told CEP News the U.S. dollar has started to recover in anticipation of a second-half turnaround.

The Fed is still going to be concerned about growth, the economy and the credit crisis but in the past few weeks sentiment has really started to turn. There are signs the credit crisis is improving and that the Fed wont need to cut rates anymore. Inflation is a growing concern and I dont think the Fed can just keep cutting, the trader said. Youre going to see the U.S. dollar start to recover in the short term because theres a sense the U.S. economy has started to turn the corner. I think it will outperform in the next 3-6 months.

The market, he said, is heavily skewed towards some scenario that indicates a pause so if the Fed continues to cite downside factors in the economy, the U.S. dollar could suffer. The risk is that if theyre dovish youll probably see a much bigger move the other way, he said.

He said a statement that points to more easing could easily spark a two-cent rally in the euro against the USD, while rhetoric indicating a pause might only bump the dollar towards 1.5500.

In a note to clients, RBC Capital Markets senior currency strategist Matthew Strauss noted the same skew.

With the market already discounting a bottom in the Fed Fund rate at 2.00% -- and the possibility of a hike before year-end - the upside potential for USD is limited, he wrote.

Although Fed fund futures are pricing in a 20% chance of no cut, it would be a big surprise, according to Adam Boyton, a senior foreign exchange strategist at Deutsche Bank AG, the worlds biggest currency trading firm. He expects the U.S. dollar to shoot up 0.5% to 1.0% if rates are held steady but said it will later prove to be a selling opportunity.

No cut at all would be quite supportive for the dollar on the day but ultimately I dont think that will signal the big turn in the dollar because we think the economy will suffer further and the Fed will cut further, he said, adding he expects the euro to hit 1.65 in 3-6 months as the Fed eventually lowers rates to 1.50%.

Strategists are divided on exactly how the Fed will signal that inflation risks have increased while still demonstrating the need to cut rates. They say knee-jerk market reactions to the decision may create opportunistic volatility.

In the past, the Fed has used a variety of ways to foreshadow a change in policy. Officials could cite the cumulative 300 basis points of easing since September and note monetary policy works with a lag, they could reference stabilizing market conditions or they could warn of rising inflationary pressures.

The Fed took a wait-and-see approach at the end of the rate hiking cycle that ended in June of 2006, saying, The extent and timing of any additional firming will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Scotia Capitals Sutton said the market is hungry for a pause and will make an effort to read one into the statement.

As long as it hints at a pause, that will be taken as a pause, she said.

The FOMC rate decision will be announced at 2:15 p.m. EDT on Wednesday.