Pound gets hammered
I said the employment report wasn’t bullish as it may have looked on the surface but I wasn’t expecting the move we’ve just seen. GBPUSD was frog marched down to the support at 1.3130 I highlighted earlier.
It was a quick move and we’d already bounced to 1.3150 before I even saw it. We’re now at 1.3168 with all the hard work to do again. Look for 1.3175/80 to show resistance again, and then 1.3200 once more, but maybe with not as much strength this time.
The biggest signal for me after the drop was is that perhaps this rally is not built on anything really solid. If that’s the case, were always at risk from sharp reversals as nervous traders get out at the first signs of trouble. This bounce is fairly impressive though. Look at 1.3180/1.3200-1.3130 as your range for now.
As always EURGBP is in the thick of it also and the run through 0.9000 also helped tip cable over. That looks like a typical stop run as we’re now back at 0.8983. We do have a lumpy option going off here at 0.9000 (711m) so that could be a factor later on. I’ll have the full options board up shortly.