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It’s going to be a busy and eventful week – lets have a look at the coil going on in Sterling. I don’t suppose its a surprise to see a coil happening in some Sterling products as everyone waits to see Theresa May pull the Article 50 trigger.
Two nice coils building there on the weekly charts. The GBPJPY coil below is a little different as it appears to be coiling up due to pressure building between the weekly 20& 50MA.
Finally here is the Daily EURGBP – which has not been coiling as clearly as the others, but we have seen a break of a longer term trendline indicating Euro Strength and GBP weakness.
Lets see if that price comes down and re-tests the trend line.
So what are we to make of all this? My own view was that there was likely to be another attack on GBP once Article 50 was triggered – if for no other reason than spitefulness on the part Juncker, Tusk and EU bureaucrats et al.
Interestingly on my STAM analysis after a weak start to the year the EURO has strengthened in the last week or two. Does someone know something we don’t? Do people already know that Geert Wilders and Marie Le Pen will fail in their Dutch and French elections? Or is it another example of complacency? What do you think?
On a broader scale I have started to see a few pairs coiling up across the majors – could that be a sign that something big is coming down the tracks? Or simply a case of a shift is about to occur? Lets keep our eyes peeled and our powder dry!
Hope that provides some food for thought.