GBPUSD Short on account of Dovish Bank of England

Updated
Technical Analysis:
  • Technicals are on the chart, the Fibonacci Retracement, S/R Levels and Measures of Trend.
  • The pair is trading below the 200 Day MA and the Long Term Pivot at 1.56600. Typically, short positions are sought with this in mind.
  • If today's daily candle close is bearish, then the candlestick formation becomes an Evening Star at 52400 Resistance.


Fundamentals and Market Conditions:
GBP:
  • Last week's dovish turn from the BoE makes sense in light of upcoming headwinds facing the UK.
  • First, significant front-loaded fiscal consolidation is likely to weigh on growth.
  • Second, the Brexit debate will heat up soon and potentially deter foreign portfolio and direct investment flows into the country.
  • This is particularly problematic given the UK's large current account deficit.
  • Finally, underlying sources of labour market health, such as hours worked and weekly earnings, are turning.
  • The main risk to this trade is a resurgence in UK economic data.


USD:
  • Regardless of last week's downtick in economic data, King Dollar has held strong, resorting to a range rather than a severe correction in the majors.
  • The Fed is currently more hawkish than the BoE and as we all know Central Banks and their Fiscal/Monetary Policy are King when it comes to driving currencies.
  • Federal Funds Futures currently imply a 70% probability of a rate hike in December. See here.

Comment
Trade is in the Red after last night's FOMC Minutes release though don't think it'll get past the 200 SMA though.
Comment
Friday D1 TFclosing with an excellent Bearish Engulfing Candle.
1.5300 proved to be formidable resistance this week.
Comment
Back in the green.
Comment
#GBP bears smelling blood? #BoE's Carney re-iterates UK will likely remain in low interest rate environment for some time.
Comment
Target 1 at 1.500 hit.
Half the position closed and profits booked and Stop Loss amount reduced by half.
Comment
SL at BE.
Trade closed: stop reached
Meh. Half the position moved back to hit stop loss at BE.
Win - Win either way.
Happy about this one.
BOEfedGBPGBPUSDhikeRATEshortUSD

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