Cable Bearish Probability in Symmetrical Triangle | Lower Highs
Updated
Technicals:
Fundamentals:
Key Risks / Bullish Scenario:
- The series of Lower Highs that have played out the past few weeks, suggest that a downtrend is in place.
- The recent bullish wave, capped by the 1.55 handle could indicate that the Bears may further take control of the pair and push it to the bottom of the symmetrical triangle within which the pair is trading.
- Initial target is just above 1.533, a level that confluences with the 200 Day Simple Moving Average.
- Any push and convincing follow-through above 1.55 and Long Positions will be sought.
Fundamentals:
- US related economic data is expected to improve towards the end of the week, after the few past releases that were disappointing.
- BoE officials this week commented that a slowdown in UK economic data is to be expected in the wake of global slowdown and local factors negatively implicate the British economy. (citation needed)
- As far as relative monetary policy is concerned, the US is on track to raise rates earlier than the BoE. This differential typically implies a down-trending GBPUSD, even if very slow.
Key Risks / Bullish Scenario:
- The Bank of England's view that U.K. growth can resist the pressure of a global slowdown has the backing of many economists. This implies that the GBP may continue to drift sideways rather than sharply lower in the wake of slow growth. (citation needed)
- If the US Fed rate hike expectations are downgraded further beyond Dec 2015, then the bulls check-in and the Cable rises.
Trade active
Short Position is in play with stops at 1.54700.Comment
Currently the Sterling is firmer, and is awaiting Bank of England Mark Carney's speech for cues later on today.Trade closed: target reached
Target 1 Reached.Trade active
After a more dovish than expected FOMC, short positions were re-entered 15 mins after FOMC release. New Target is Target 2.Trade closed: target reached
All Targets hit. Profits booked in full>See new trade here:
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