The GBP/USD continues to lose ground in early trading today and the depths of the forex pair are bringing into view long term perspectives.

The GBP/USD is traversing near the 1.17500 level as of this writing.  Yesterday’s high of nearly 1.18310 began to wave early and support levels have continued to prove vulnerable. On the 17^th and 18^th of August the GBP/USD was still above the 1.20000 level and some speculators may have thought support lines could be held at those ratios. However, selling of the GBP/USD continues to grow and its pace downwards yesterday certainly quickened.

Long term charts and historical perspective will be debated as the value of the GBP/USD currency pair is challenged.  During coronavirus and the days of the Brexit chaos the GBP/USD did test low depths, but both those events were overcome. The forex pair was able to climb and reached what many financial houses – particularly in the U.K – believe was a more ‘reasonable’ equilibrium between 1.30000 and 1.40000 with outliers being seen on occasion. The price of the GBP/USD is now lower than it was during the worst of Brexit fears, when the 1.19000 ratio came into sight.

Coronavirus, Brexit and Ronal Reagan Topics of Discussion with GBP/USD

During coronavirus the GBP/USD sank below the 1.15000 level in March of 2020, but by September 2020 the currency pair was again above 1.30000. Traders and financial houses this time around may not believe a quick turnaround should be expected. Putting aside Brexit and coronavirus, the last time the GBP/USD traded this low was when Ronald Reagan was President of the U.S and Margaret Thatcher was leading the U.K. The USD was strong at that time due to massive growth created by Reagan’s economic policy. The GBP/USD touched the 1.05000 level in January of 1985.

• Decision on U.K Prime Minister will be known on September the 5^th.
• Can the BoE keep pace with the Fed to safeguard value of the GBP/USD?

Traders Looking for Reversals Higher Short Term in the GBP/USD need to be Careful

The GBP/USD does appear to be oversold from a historical perspective.  The GBP/USD has a long track record of trading at much higher values. However, short term traders who believe the forex pair is suddenly going to turn around and march higher need to keep their ambitions in check. Economic events are turbulent. U.S Federal Reserve policy remains unclear, but will likely remain hawkish over the next few months. And the decision regarding who will be the next Prime Minister of the U.K will be decided in a little less than two weeks.

Coming events this week via the central bankers meeting in Jackson Hole, Wyoming will factor into Forex via speeches made. The long term lows being tested by the GBP/USD are certainly attractive as speculative wagers, but traders should remain conservative. Psychological marks like the 1.17000 level may become a factor. If the 1.17300 mark is suddenly tested and the 1.172500 level were to prove weak, this could set off additional alarm bells. Traders need to use total risk management and keep their targets realistic. Looking for upside movement via natural reversals higher may seem tempting, but in the short term should be done with extreme caution.

GBP/USD Short Term Outlook:

Current Resistance: 1.17500

Current Support: 1.17400

High Target: 1.18240

Low Target: 1.16900

The USD/TRY remains mired within a long term bullish ride upwards, as Turkish economic policy remains mismanaged.

The USD/TRY remains within sight of the 18.0000 mark.  The past week of trading has seen the USD/TRY currency pair within sight of the important ratio several times, but has not quite been able to topple the mark. However, speculators who are capable of holding long term positions may remain happily bullish as they pursue the trajectory upwards. Unfortunately for the citizens of Turkey a serious amount of fiscal mismanagement has led to the demise of the Turkish Lira.

Long Road Ahead Remains Troublesome for USD/TRY as Politics Impede

Turkish leadership largely remains within the grip of President Erdogan. His decisions and interventions within the fiscal policies of the Turkish central bank have certainly had a negative effect on the USD/TRY over the long term. If a five year chart is looked at by traders the path upwards is evident. The weakness of the USD/TRY cannot be blamed on sudden geopolitics which is inflamed via Turkey’s neighbors of Ukraine and Russia.

No, the President of Turkey has acted with a solid grip which sometimes calls into question his motives regarding interest rates, inflation and practical economic theory for many years. Until better policy comes from Turkey, the USD/TRY will remain in an upwards trajectory. For speculators this means they will likely want to remain buyers of the Forex pair and take advantage of moves higher.

• While sudden spikes downwards in the USD/TRY certainly occur, price action is by and large upwards but sometimes runs into stiff resistance. The past week has demonstrated these results.
• Current resistance near the 18.00000 is likely to prove vulnerable, but the question is when it will be vanquished.

All the King’s Horses and Men Cannot Not Put the USD/TRY Together Again

Speculators who pursue the USD/TRY must take into consideration overnight charges, spreads between bids and asks, and understand any other charges which might be seen if they want to trade the currency pair.  Upwards price action in the USD/TRY makes it a dynamic forex pair to pursue. However it is not easy, entry price orders must be used and stop losses are needed to protect against sudden spikes downward.

Buying the USD/TRY on slight dips in price seems like a legitimate wager.  Risk taking tactics need to be used dynamically. Traders must be prepared to hold positions overnight in case resistance levels prove durable like they have the past week. Quick hitting trades may be frequently impossible because of the total expense of putting a USD/TRY position on, meaning too much leverage might be needed to make a quick wager that produces results, and this could lead to massive losses. Unless a trader has deep pockets and a long term timeframe, the USD/TRY may be better watched instead of being traded.

Turkish Lira Short-Term Outlook

Current Resistance: 19.97000

Current Support: 17.90000

High Target: 18.10000

Low Target: 17.82000

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BNB/USD was able to move to a five day high early this morning, and this incremental climb may attract speculative wagers on the buy side, or not.

BNB/USD is trading near the 333.5000 mark as of this writing.  Earlier this morning Binance Coin moved to a high not seen since the 10^th of May when BNB/USD actually hit the 338.2000 vicinity. The ability to break through highs seen on the 23^rd of May, when BNB/USD hit the 337.2500 ratio may get the pulse of speculative bulls racing, but it may attract skeptics too.

Before traders who remain optimists about the potential of buying BNB/USD, this if they consider the cryptocurrency in oversold territory, some words of warning: we are still within a bear market until proven otherwise.  The sudden rise in value of BNB/USD has come on the heels of an incremental climb which technically could be important if the broad cryptocurrency market were to suddenly turn around in mass, and start showing sincere price velocity upwards breaking resistance levels across the board, but it has not.

Skeptics who remain doubtful of BNB/USD and its price direction may view the recent climb higher as an opportunity to be sellers again. Traders are advised not be contrarian all of the time, sometimes moves higher can ignite into powerful trends in cryptocurrencies, but recent history has demonstrated that these moves upward have met stiff resistance and turned lower with dangerous volatility.

While bullish traders may respectfully disagree, BNB/USD would have to break the 340.0000 mark to really get folks to believe there is a chance that momentum is shifting. Technically, it can be argued that BNB/USD would actually have to break the 350.0000 ratio to verify a strong move higher, until this happens what we may be witnessing are mere short term reversals in a cryptocurrency market that remains choppy at best. The long term bearish trend remains intact for now and market conditions are still very fragile.

If BNB/USD falters and drops below the 333.0000 level near term another test of the 331.0000 mark could develop rapidly. Traders who want to sell and believe resistance will start to prove durable within the current price realm of Binance Coin are advised to use their risk taking tactics wisely. The cryptocurrency market remains volatile and sudden moves could develop quickly. The use of entry price orders and stop losses are needed. Selling BNB/USD and looking for lower values near term may be the speculative wager traders want to pursue still.

Binance Coin Short-Term Outlook

Current Resistance: 336.8100

Current Support: 331.9000

High Target: 340.2300

Low Target: 323.1000

Within narrow ranges, the price of gold is still moving since the start of trading this week between the support level of $1915 and the resistance level of $1945. It settled around the level of $1927 at the time of writing the analysis. Stability returns to the gold market, as investors balance between the future of tightening the Fed’s policy, which leads the general trend of global central banks in tightening, and between the continuation of global geopolitical tensions, which support the demand for buying gold as a safe haven. The US dollar stabilized and Treasury yields rose after Federal Reserve Governor Lael Brainard, who is awaiting Senate confirmation to serve as Vice Chairman of the Federal Reserve, described the task of reducing inflation pressures as “of paramount importance” and indicated a strong approach to shrinking the Fed’s balance sheet.

The United States said it would impose “significant and immediate economic costs on the Putin regime for its atrocities in Ukraine, including Bucha”. The sanctions include freezing the US assets of Putin’s daughters and cutting them off from the US financial system. Washington also said it would apply “total ban” sanctions against Sberbank and Alfa Bank, Russia’s largest public and private financial institutions.

For its part, the European Commission has already proposed new sanctions, including a ban on imports of Russian coal, raising concerns about a new challenge to global supplies.

Stocks fell and bond yields rose on Wall Street on Wednesday after details from the Federal Reserve’s meeting last month showed that the US central bank intends to be assertive in its efforts to combat inflation. Meeting minutes show that policymakers agreed to begin reducing the Fed’s stockpile of Treasuries and mortgage-backed securities by about $95 billion per month, starting in May. As a result, the S&P 500 fell 1%, and the Dow Jones Industrial Average fell 0.4%. Tech companies suffered some of the biggest losses, sending the Nasdaq down 2.2%. The yield on the 10-year Treasury rose to 2.61%.

The minutes of the meeting three weeks ago reveal that federal policymakers generally agreed to start reducing the US central bank’s stockpile of Treasury securities and mortgage-backed securities by about $95 billion per month, starting in May. This is more than some investors expected and almost double the pace the last time the Fed trimmed its balance sheet. At the meeting, the Fed raised its benchmark short-term interest rate by a quarter of a percentage point, its first increase in three years. The minutes showed that many Fed officials wanted to raise interest rates by a larger margin last month, and still see “one or more” of these huge increases likely to come at future meetings.

Overall, investors are focused heavily on Fed policy as the central bank moves to reverse low interest rates and the exceptional support it began providing the economy two years ago when the pandemic pushed the economy into recession. The Fed’s proposed timetable to allow billions of bonds and mortgage-backed securities off its balance sheet was hinted at Tuesday in comments by Fed Governor Lael Brainard, who said the process could begin as soon as May and continue at a rapid pace.

A rapid reduction in the Federal Reserve’s balance sheet will help raise long-term interest rates, but it also contributes to higher borrowing costs for consumers and businesses. Traders are now pricing in a roughly 77% probability that the Fed will raise its key interest rate by half a percentage point at its next meeting in May. That’s double the usual amount and something the Fed hasn’t done since 2000.

US inflation has reached its highest level in four decades and threatens to derail economic growth. Rising prices on everything from food to clothing have raised fears that consumers will eventually cut back on spending. Russia’s invasion of Ukraine added to those fears, sending energy and commodity prices, including wheat, higher.

US Treasury Secretary Janet Yellen warned a House of Representatives committee on Wednesday that the conflict would have “enormous economic ramifications in Ukraine and beyond.”

The conflict in Ukraine has continued to create financial pressures against Russia. The White House said Western governments would ban new investors in Russia after evidence that its soldiers deliberately killed civilians in Ukraine. The US Treasury said that the government of Russian President Vladimir Putin will be prevented from repaying dollar debts from US financial institutions, which could increase the risk of default. They have resisted calls to boycott Russian gas, Putin’s largest source of exports, due to the potential impact on their economies.

Despite the strength of the US dollar, the gold market still maintains the bullish trend, as I mentioned before, global geopolitical tensions and the return of anxiety over the Corona epidemic will remain supportive factors for the gold market. According to the performance on the daily chart, stability will remain around and above the resistance at $1900, supporting the bulls’ continuous control of the trend. The closest resistance levels are  $1945 and $1970, and the last level is crucial for the price to reach the historical psychological peak of $2000 again.

On the downside, I still see the psychological support of $1880.