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5 "Tells" that the Stock Markets Are About to Reverse

British Pound vs Australian Dollar (GBP/AUD) Trend Forecast into Mid 2011

Currencies / British Pound Oct 14, 2010 - 07:11 PM GMT

By: Nadeem_Walayat

Currencies

Best Financial Markets Analysis ArticleAndrea asks : We are traveling to Perth in March 2011, are we best changing our money now? Or is there a chance the exchange rate will be better in the new year? Please help.

In answer to Andrea and others who have posted similar comments requesting an analysis of GBP/AUD, this analysis seeks to extrapolate recent in depth analysis on the Dollar and British Pound with regards to the Aussie Dollar.


04 Oct 2010 - British Pound Sterling GBP Currency Trend Forecast into Mid 2011

The British Pound is in a multi-year bull market against the U.S. Dollar, I expect the current phase of this bull market to see GBP trend higher into mid 2011 targeting a rate of between £/$ 1.80 and £/$1.90 as the below forecast trend graph illustrates (current £/$ 1.58), though I would not be surprised if GBP trades above £/$1.90. I also expect sterling to strengthen against the Euro that targets a trend high E/£ 1.30 (current E/£1.15). However the forex markets will be just as volatile as they have been during the past 2 years as future sovereign debt and banking sector crisis will temporarily result in a surge of safe haven dollar buying, which will present future opportunities to short the dollar.

12 Oct 2010 - USD Index Trend Forecast Into Mid 2011, U.S. Dollar Collapse (Again)?

The USD index is targeting a trend to a new all time low in the region of USD 69-70 by mid 2011, that will be followed by a strong rally that could see the Dollar retrace all of the decline back towards USD 80. The problem is with the timing of these trends as volatility will be high. It's a tough exercise but I conclude in the USD taking some time to base following the mid 2011 low before the subsequent bounce to 80 takes place. Therefore the forecast trend is USD 69-70 by mid 2011 followed by a bounce to 80 by October 2011. The immediate future is suggestive of an imminent bounce towards 80 by early December before the final swing lower to a new all time low takes place as illustrated by the below forecast trend graph.

The above analysis forecasts GBP 17% rally by mid 2011, against a USD 9% fall by mid 2011, which therefore implies a relatively strong sterling trend against that of other currencies to the tune of a net average of +8%, which on face value suggests GBP could strengthen against the AUD by mid 2011 by upto 8%.

British Pound / Australian Dollar Technical Analysis

Whilst I do not have the time to perform an in-depth analysis of the Aussie Dollar, however I can test to see if the above estimated relative strength is likely to pan out against AUD or not.

The Australian dollar is clearly in a powerful multi-year uptrend that has its basis in structural fundamentals both economic and resource based rather than technical. The range appears to be between a low of 0.58 and a new all time high 0.67 against the last 0.62. The trend targets a GBP/AUD rate of between 0.64 and 067 by mid 2011 (+3% to +8%).

What would I do if I NEEDED to convert from Sterling to AUD by Mid 2011?

Given that the Aussie Dollar is expected to continue strengthening against sterling, I would bite the bullet and transfer an amount of 5-10% every week, and take advantage of any dips to below 0.60 (could trade to 0.58 to transfer larger percentages).

Comments and Source : http://www.marketoracle.co.uk/Article23511.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Susan Millar
15 Oct 10, 19:04
UK Pound Sterling to Canadian dollar forecast

I have 13,000 pounds sterling and want to know if you could please tell me when the best time would be to convert this to Canadian dollars.

These funds were recovered from the Icelandic bank collapse (they were in my British Bank savings account with moderate interest in the IOM) and I have already lost more than half so I need to maximize on the exchange. I can be patient but I am worried that things may get worse.

Thanks for your efforts!


Nadeem_Walayat
15 Oct 10, 20:13
GBP / CAN$

Hi Susan

without indepth analysis it would be pretty much quick guess, and your not saying how long your comfortable waiting for ?

a year ?

10 years ?

remember ALL currencies are in freefall skydiver style against one another, so yes there will be times when the rate of decent for the Can$ will be greater than that for GBP so the GBP will catch up.

If you are able to wait for as long as 10 years then during such a time period there should be several opportunties to transact at about a 1/3rd better rate than the current rate.

NW


Susan Taylor
20 Oct 10, 09:14
British Pound to Turkish Lira

I am holding a large sum of money in pounds in the hope it will rise against the Turkish Lira. What is the short term prediction (3 months) for a higher valued pound against the lira. Interest bearing deposits are returning 8.4% interest before 15% tax deduction but deposits must be in lira. Do I wait for the pound to go up or cash them and invest in a IBD? Thanks for your opinion.


Sukh
20 Oct 10, 09:29
GBP/Indian Rupees

Hi Nadeem,

I have £20000 and as banks are not giving the good return, I am planning to invest the money in india for 3 year period. I can see the Indian Rupee has strengthened by nearly 20% since the start of reccesion. How would rupee/GBP behaviour be over next 6 months period. Whats the good time to convert it to Indian Rupees

Many Thanks

Sukh


Nadeem_Walayat
21 Oct 10, 05:15
British Pound / Turkish Lira

HI Susan

A quick look without any analysis suggests that the British Pound should strengthen against the Turkish Lira towards possible 2.35 from 2.22. Though as I mentioned in the article if you need the cash by a certain date then its best to transfer over small amounts every week i.e. to scale into your Lira position.

NW


Nadeem_Walayat
21 Oct 10, 05:15
British Pound / Indian Rupee

Hi Sukh

A quick look without any analysis suggests that the British Pound is in a long-term downtrend against the Indian Rupee. I don't see any reason to suggest that this trend is going to reverse.


David
08 Nov 10, 04:13
GBP - AUD

I have £15000 here in England and i am wondering whether it is worth leaving it here or taking it back to Australia with me. Have you any insight into what the Pound-Dollar (Aus) will be doing over the next year or two.


Ben Thompson
01 Dec 10, 18:47
GBP - NZD

Hi Nadeem,

When I left the UK back in 2007 I left all my savings (128,000GBP)there in the hope it would improve but it has since plummeted. Would it be best to remove the money now before it gets worse or wait it out? I see the forecast for the GBP/AUD is bad, normally the NZD piggybacks on the AUD. Any ideas as I've already lost the equivalent of 100000NZD already from the drop in the pound?


Nadeem_Walayat
02 Dec 10, 17:52
GBP - NZD

Hi

If as expected sterling will continue to devalue against AUD, then if NZD follows AUD then the same should be true for sterling against NZD.


Lewis
10 May 11, 14:44
£vs$

Hi Nadeem

Just a quick question I've been looking to see if there is any update on £/$ as we are fast approaching the Mid 2011 and we are a fair way off on the 1.80-90 do you still hold this view or can you point me to the latest update on this pair as I hold your analysis in high regard

Thank You and all the best.


J.Salter
27 Jul 11, 03:43
AUD 0 UK pound

I have a large amount of UK £ to exchange into AUS $. how long shall i wait ???


C Drinkeld
06 Oct 11, 15:55
Pound sterling to AUS Dollar

The OZ dollar was up to 1.63 to the pound early this week and has dropped to 1.58 today. Will this trend continue and be back around the 1.50 mark before long? I want to transfer some sterling to OZ and would like to know whether to transfer it now while it is in the upper 1.50's or wait and see if it goes up above 1.60 again anytime soon.

Many thanks


Jason
26 Oct 11, 10:33
GBP/AUD - Latest forecast for 2011/12

Hi Nadeem

Looking at your prediction back in October 2010 you appear to have been fairly accurate in terms of Actuals v Forecast for GBP/AUD.As per comments from others will you be updating the GBP/AUD Trend chart for late 2011 to mid 2012?

Thank you in anticipation.


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