Pound Just Broke The Technical Support Level Of 1.5960

[Realistbear]

Or even, yes vs no.

Let us make this a bit simpler.

Do you have any examples of deflation occuring under a paper money or PC number money standard before a full blown economic collapse?

The answer to this is either yes or no. Very simple response and that's all that is needed.

After this, what you do is put a one word answer, either yes or no. Theres no need to flail on like you are on crystal meth.

Q is illogical. Its like asking do you have any examples of the sun shining when the sun was not behind any cloouds.

Deflation and economic collapse are symptomatic of the same cause: boom (inflation).

There are no examples of a bust following the symptoms of a bust. There are examples that show the economy is cyclical: inflation follows inflation and vice versa.

[Injin]

Q is illogical. Its like asking do you have any examples of the sun shining when the sun was not behind any cloouds.

Deflation and economic collapse are symptomatic of the same cause: boom (inflation).

There are no examples of a bust following the symptoms of a bust. There are examples that show the economy is cyclical: inflation follows inflation and vice versa.

No, really theres no need to act like you are a homless schizophrenic, all you have to do is answer yes or no.

[200p]

£ looks like its moving up over the longer term

[Britney's Piers]

Foundation X are holding up the pound.

[kilroy]

£ looks like its moving up over the longer term

looks like a pennant targeting parity to me....

[LJAR]

Deflation occurring under a gold standard system is reasonable - it used to happen in every recession (which used to be called depressions)

It was understood that labour had to become more competitive and so price itself back into the market (and so wages and the price of goods dropped.)

This is because the prices of goods were not increasing due to a larger amount of money chasing the same goods.

Nowadays we don't get deflation because we have an inbuilt inflationary pressure in our money supply (generated by the credit that is magicked out of thin air by the banks)

Deflation is not one commodity or a bunch of commodities coming down in price - the same way that inflation is not when they rise in price. it is a systemic move of everything to a lower nominal base (usually due to a contraction in money)

We have had a contraction in credit money - which might indicate that we should be getting deflation....

BUT we have also had massive printing by central banks and this currently seems to be winning the battle. So inflation is doing the job of reducing the cost of labour in real terms.

The point remains - there are very few examples of deflation after 1940 - the western world was too frightened of it.

[markyh]

Why is this a worry? For me this was money making. Daily movements like this off price action are an Intraday traders bread and butter. I took a price action based short entry @ 15995 with a 27 pip s/l and a 50 pip TP level of 15945.

Made my 50 pips for the day @ £5 pip so a nice £250 earned thankyou! Tax Free too. Since i started trading forex 12 months ago I have seen GBP/USD range from 1.45 to 1.64.

Matters not, all that is important is you pick the right price action trades in the correct direction for the trade 60% of the time running a 2:1 risk reward ratio.

M

GBP/USD(CCY: GBPUSD=X )

Last Trade: 1.5959

Trade Time: 13:31

Change: 0.0032 (0.20%)

Bid:

Not a good day for the Pound: Huge leap in current account deficit and worst trade figures ever. Surprised £ has not gone down more.

1.5960 was apprently the technical support level which, if broken, would drop us down to 1.58.

[Realistbear]

Sterling is up against all comers today which suggests the technical analysts prediction of a major breakdown at 1.5960 was little more than astrological charting or random "luck."

Currencies

Currency Pair Price Change

GBP to USD 1.6028 +0.0021

GBP to EUR 1.1386 +0.0043

GBP to JPY 133.0811 +1.0603

GBP to TRY 2.4942 +0.0017

GBP to THB 48.6350 +0.0956

Better to look at the fundamentals as it seems that sentiment is the ultimate driver and right now no amount of bad news can shake our economy as we saw yesterday with the worst ever trade gap and a 25% increase in current account deficit coupled with more bad news for house prices. This kind of resilience is even more remarkable when you consider that our "recovereh" has not materialised and another negative Q puts us in recession. It may be the banksters driving the market as they are all here and presumably get their bilions in bonuses and skim money paid in pounds.

[Realistbear]

No, really theres no need to act like you are a homless schizophrenic, all you have to do is answer yes or no.

A lawyer once asked the defendant in the dock: Answer yes or no, have you stopped beating your wife.

When the question is posed illogically the answer must always be to rephrase the question.

The bottom line: the economy is cyclical a boom always follows a bust just as night follow day. Are there examples of this? Yes there are--so much so that there are no examples of anything other than a boom following a bust or inflation following deflation.

[Injin]

A lawyer once asked the defendant in the dock: Answer yes or no, have you stopped beating your wife.

When the question is posed illogically the answer must always be to rephrase the question.

The bottom line: the economy is cyclical a boom always follows a bust just as night follow day. Are there examples of this? Yes there are--so much so that there are no examples of anything other than a boom following a bust or inflation following deflation.

Yes, but my question here is akin to "do you know your wife, yes or no?"

You've had 6 attempts at it now and all you've done is go vague, be irrelevent and now finally attack the question.

It's a perfectly reasonable question - you are calling deflation as inevitable. I'm asking for a list of examples from history from similar or identical monetary systems that would give rise to that belief.

You aren't providing any. You are just firing word salad back at me, like someone from a secure unit or something.

I'll ask again and i'm going to ask over and over every time you mention deflation until you either stop shilling for the CB or find me some -

Can you list any deflations under a paper/pc number standard that came before an economic collapse?

Edited March 30, 2011 by Injin

[Guest_FaFa!_*]

Sterling is up against all comers today which suggests the technical analysts prediction of a major breakdown at 1.5960 was little more than astrological charting or random "luck."

I looked at the chart yesterday but couldn't be bothered to argue with you. But anyway.....

1. The market went through 15960 on the 28th, not yesterday, according to the IG index chart I am looking at. So you need to start by reading the chart correctly

2. When people talk about support that does not mean that the market will break through it immediately, it often takes several attempts.

3. It also does not mean that the market will start a massive sell off as soon as it is one pip below the support level, it is usually a general area.

4. Most importantly, when people talk of breaking a support line, they are looking for a close below that level, not just an intraday movement there.

5. The market has moved from 16400 to 15960 in a matter of a week. It is therefore oversold and due a bounce. it would be entirely logical for it to hit 15960 then bounce before attempting to again. The daily chart hit the bottom of the bollinger band yesterday. That, in combination with the support level, would also indicate a bounce.

6. The 15960 isn't that big a deal. It is simply the bottom of the range that GBPUSD has trending in during Feb/Mar.

So as far I am concerned, 15960 is thus far demonstrating that it is an area of support and the moves are not surprising.

As for your other comments - Sterling is massively down since the highs of 2007/08 time. Given that the problems in the UK are by no means unique, how much further do you really expect it to fall?

[DungBeetle]

Bloody nonsense. Support levels are by agreement of a perceived level, because eveyone uses the same methods to calculate this level. You can't shy away from the physics of fundamentals and sheer belief.

[Left the UK 2009]

Just noticed Fafa`s post while writing this and he explains it far better than I could, just typical market movements. I will be looking to sell again when we reach the 25 day moving average.

[Guest_FaFa!_*]

Bloody nonsense. Support levels are by agreement of a perceived level, because eveyone uses the same methods to calculate this level. You can't shy away from the physics of fundamentals and sheer belief.

Sorry is that aimed at me? I agree you cannot shy away from fundamentals and sheer belief, but for realistbear to rubbish charts on the basis of his own flawed reading of them is wrong in my opinion. I don't agree that everyone uses the same methods to calculate support areas, there are a variety of ways of doing this, not everyone is the same.

[Realistbear]

Yes, but my question here is akin to "do you know your wife, yes or no?"

You've had 6 attempts at it now and all you've done is go vague, be irrelevent and now finally attack the question.

It's a perfectly reasonable question - you are calling deflation as inevitable. I'm asking for a list of examples from history from similar or identical monetary systems that would give rise to that belief.

You aren't providing any. You are just firing word salad back at me, like someone from a secure unit or something.

I'll ask again and i'm going to ask over and over every time you mention deflation until you either stop shilling for the CB or find me some -

Can you list any deflations under a paper/pc number standard that came before an economic collapse?

inflation is inevitable as it is part of the cycle. similarly deflation is inevitable as is part of cycle. Inflation always follows deflation and inflation always follows deflation. Think in terms of a cycle and your question is answered. Also look at what happened post the 20's boom and inflation--years of stganation and deflation. Japan is another case in point.

Nuff said.

Edited March 30, 2011 by Realistbear

[Injin]

inflation is invitable as it is part of the cycle. similarly deflation is inevitable as is part of cycle. Inflation always follows deflation and inflation always follows deflation. Think in terms of a cycle and your question is answered. Also look at what happened post the 20's boom and inflation--years of stganation and deflation. Japan is another case in point.

Nuff said.

In the 20's there was a gold standard.

Japan exported their inflation and never deflated.

Do you have any actual examples of deflation in a paper/PC number monetary standard to back up your argument?

Yes or no?

[Guest_FaFa!_*]

Japan exported their inflation and never deflated.

I know you have given your reasons for this before, but could you give me a run through of your arguments for this?

[Democorruptcy]

Better to look at the fundamentals as it seems that sentiment is the ultimate driver and right now no amount of bad news can shake our economy

You still don't get it do you? These days the markets have nothing to do with fundamentals.

They have more to do with central bankers being roped together climbing up a debt mountain. If one of them loses their hand hold and falls....

[Realistbear]

I looked at the chart yesterday but couldn't be bothered to argue with you. But anyway.....

1. The market went through 15960 on the 28th, not yesterday, according to the IG index chart I am looking at. So you need to start by reading the chart correctly

2. When people talk about support that does not mean that the market will break through it immediately, it often takes several attempts.

3. It also does not mean that the market will start a massive sell off as soon as it is one pip below the support level, it is usually a general area.

4. Most importantly, when people talk of breaking a support line, they are looking for a close below that level, not just an intraday movement there.

5. The market has moved from 16400 to 15960 in a matter of a week. It is therefore oversold and due a bounce. it would be entirely logical for it to hit 15960 then bounce before attempting to again. The daily chart hit the bottom of the bollinger band yesterday. That, in combination with the support level, would also indicate a bounce.

6. The 15960 isn't that big a deal. It is simply the bottom of the range that GBPUSD has trending in during Feb/Mar.

So as far I am concerned, 15960 is thus far demonstrating that it is an area of support and the moves are not surprising.

As for your other comments - Sterling is massively down since the highs of 2007/08 time. Given that the problems in the UK are by no means unique, how much further do you really expect it to fall?

Based on the fundamentals and given that the US economy has probably bottomed and we are still to bottom: 1.45-50.

We are AAA rated by Fitch and yet have a serious debt problem with 5.2TR with no credible plan to repay it. Unemployment is rising. Retail is deteriorating. There is a HPC underway and that will place considerable stress on the banks and bloc any moves by the BoE to hike.

I cannot think of a single reason why £ should be rising as it is at the moment--especially after two indicators went red yeaterday (worst ever trade balance and 24% grown in c/a deficit). I know these are all fundamentals but surely, at some point, the FX market must recognise a bad prognosis.

Buy programmes kicking in for most pairs including, OAT, the Thai Bat!

Currencies

Currency Pair Price Change

GBP to USD 1.6054 +0.0048

GBP to EUR 1.1392 +0.0049

GBP to JPY 133.4270 +1.4062

GBP to TRY 2.4970 +0.0045

GBP to THB 48.6977 +0.1583

More currencies rates »

[R K]

GBP/USD(CCY: GBPUSD=X )

Last Trade: 1.5979

Trade Time: 14:42

Change: 0.0012 (0.07%)

So much for "technical" analysis. The so-called support level of 1.5960 was broken and then the buying began--not the selling!

It will take more than a HPC, ever-widening trade gaps, riots in the street, expanding deficits and rising unemployment to keep Sterling from rising against all comers.

So it was support then. QED.

I'm beginning to think you are in fact Jim Rogers and I claim my 1.6033 x 5 = 8.0165 dollars.

[Injin]

I know you have given your reasons for this before, but could you give me a run through of your arguments for this?

http://www.moneyweek.com/investments/what-is-the-carry-trade.aspx

http://www.theglobalguru.com/article.php?id=104&offer=GURU001

A better estimate of the size of the carry trade is the record of net "short" positions in yen futures on the Chicago Mercantile Exchange. This puts the total size of the carry trade as high as $1 trillion.

The BoJ holds down the value of the yen by making it possible to borrow and export the currency at naff all interest, allowing people to then buy japanese exports more cheaply and continue the spread of the bailout of japanese banks decades ago around the world. Basically, they counteracted their massively inflationary policies by adding as many holders of yen as possible - they increased both sides of the inflation equation at the same time.

[Realistbear]

http://www.bloomberg.com/news/2011-03-30/gilts-slump-pound-strengthens-as-services-grow-most-since-2002-in-january.html

Gilts Slump, Pound Strengthens as Services Grow Most Since 2002 in January

By Lucy Meakin - Mar 30, 2011 11:50 AM GMT+0100

Gilts fell and the pound rose after British reports unexpectedly showed the fastest services growth since 2002 and rebounding retail sales, bolstering the case for tighter monetary policy to stem inflation.

Short-sterling futures fell as investors increased bets on higher interest rates. Services, which account for about three- quarters of the economy, rose 1.3 percent from the previous month, when they shrank 1.1 percent, the Office for National Statistics said today. A gauge of sales rose to 15 in March from 6 in February, the Confederation of British Industry said.

There is the reason: banksters are more active paper shuffling. Germany crank out quality cars and industrial materials and we produce more bonus fodder.

Edited March 30, 2011 by Realistbear

[R K]

http://www.moneyweek...arry-trade.aspx

http://www.theglobal...4&offer=GURU001

A better estimate of the size of the carry trade is the record of net "short" positions in yen futures on the Chicago Mercantile Exchange. This puts the total size of the carry trade as high as $1 trillion.

The BoJ holds down the value of the yen by making it possible to borrow and export the currency at naff all interest, allowing people to then buy japanese exports more cheaply and continue the spread of the bailout of japanese banks decades ago around the world. Basically, they counteracted their massively inflationary policies by adding as many holders of yen as possible - they increased both sides of the inflation equation at the same time.

The problem with that is that it isn't a one way bet. As we've more recently seen, those yen liabilities have to ultimately be repaid (and/or the funding replaced in, say, dollars) else the Yen goes through the roof as everyone heads for the exit at the same time. Free lunches end eventually.

[Injin]

The problem with that is that it isn't a one way bet. As we've more recently seen, those yen liabilities have to ultimately be repaid (and/or the funding replaced in, say, dollars) else the Yen goes through the roof as everyone heads for the exit at the same time. Free lunches end eventually.

Of course, and when all that yen returns home, kaboom.

The other thing to notice is that japan already did this - there is no way for the yanks or us or anyone else to do this unless martians arrive and open an importing business with earth.

[Nickolarge]

A lawyer once asked the defendant in the dock: Answer yes or no, have you stopped beating your wife.

When the question is posed illogically the answer must always be to rephrase the question.

The bottom line: the economy is cyclical a boom always follows a bust just as night follow day. Are there examples of this? Yes there are--so much so that there are no examples of anything other than a boom following a bust or inflation following deflation.

The question you refer to was actually "When did you stop beating your wife?" It was far from illogical and did not demand a yes or no response. The point was to trap somebody who was falsely denying wife beating into an answer that confirmed that he had beaten his wife in the past.

The way that you have phrased it would have made the trap too obvious and ,in any case, would not have been allowed by the Judge.

Edited March 30, 2011 by Nickolarge