Welcome to Lost In The Exchange, the #1 newsletter for FX market updates and trade ideas.

In this weeks copy:

Sterling enters the final stretch of the year facing a delicate balance between fiscal credibility and growth concerns ahead of the Autumn Budget. Markets will scrutinise Chancellor Rachel Reeves’s ability to deliver a fiscally disciplined package while navigating political pressure to ease the cost of living burden.

If Labour pushes ahead with higher tax rates, the pound could come under a bit of pressure in the fourth quarter. Markets would likely read steeper taxes as a drag on growth and business confidence, which could see some money flow out of UK assets.

That said, if the measures are packaged as part of a credible plan to steady the public finances, the downside might be limited. On balance, sterling would probably drift lower against the euro and the dollar.

From the chart below, we see the potential for a deeper retracement after breaking key support.

Price delivery and order flow will dictate the shift, with refined entries using TPO levels.

As I mentioned in previous copies, I tried out Trading Views advanced charting tools with TPO and footprint charts being the main features. I added on CME data also rather than spot data.

My honest take; poor. I didn’t find the tools easy to read, or with clear data streams as they kept flicking back to spot market. The CME data was disrupted across TPO’s and with the footprint charts every time I flicked between charts. Additionally, the contracts were for major crosses, rather than 6B or 6E solely, which provides more consistent data.

Although Sierra Charts is not overly user friendly, it is far more advanced in terms of customisation, charting tools and contract options with CME.

I personally have a live order routing via Sierra to run this, and so far I have not found anything that comes close to it for building studies.

If you are interested to learn more about this type of data and analysis, drop a message here or reach out to me inside the discord.

I would like to see some weakness in the USD and strength in Gold, pushing markets in to a better area for medium term shorts.

Technically the market has space to move higher as the consolidation/ pullback remains shallow. A short squeeze would be preferred, offering opportunity for shorts into the proceeding weeks.

In a similar expectation of a short squeeze across major markets, I do foresee a deeper move lower in the coming weeks back towards 1.1400.

Rallies into the 1.1600 region will be met with interested sellers in my opinion, however if the delivery in order flow is too strong, short bias might shift for the meantime, but not expected to last.

The Bank of England kept rates unchanged at 4.0% today in a narrow 5–4 split, with Governor Bailey casting the deciding vote. The message was cautious: inflation looks to have peaked, but the Bank isn’t ready to declare victory just yet. Growth is soft, unemployment is creeping higher, and the MPC wants more evidence that price pressures are fading before cutting.

Markets now see a December rate cut as a real possibility, though it hinges on how inflation data and the government’s late November Budget play out. The tone was steady and pragmatic, the BoE clearly thinks the heavy lifting is done, but it’s not about to rush into easing.

That’s all for this weekend and hopefully some of these ideas are useful for the week ahead. Currently there is no active channel or community where updates on ideas are posted.

Look out for unscheduled updates during the week.

All the best.