A wretched day for the pound continues.
The pound is continuing its slide today and there’s no signs of it stopping.
We’re under 1.4100 now to a low of 1.4090 but we might get some repsite aorund 1.4070/75.
GBPUSD H4 chart
That level has been a player all the way back to Jan, so it’s shouldn;t be dismissed. We’re now down some 170 pips door to door and that might mean we’re near a stretch point. End of month, M&A action for the pound, reduction of trade war fears boosting the dollar, could well be the main driver that’s making the quid stand out from the rest.
I tried the catching the falling knife trade earlier and lost a couple of fingernails rather than fingers, mainly due to going small on mytrade size. The 1.4075 level is one I’d consider trying again but still only small and with a tight stop. Things look a bit busier on the tech from from there down through 1.4040 and into 1.4015/20, 1.3995/4000 & 1.3975/80. There’s nothing wrong with trying to catch the knife as long as you plan properly, use the levels to lean against, and keep your risk low if you’re wrong.
Update 13.14: Well that hasn’t taken long and we’ve broken 1.4070 already to 1.4066. I didn’t get a chance to even think about buying at 75 so I’m sitting on my hands now as this is looking rout-ish.
Philosophy: “Don’t be a Dick for a tick”
Read how Ryan got into trading here
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It bounced exactly from 200 HMA….
And quite a bounce too. Did you grab it?
No….just post festum observation….
I think my earlier loss scared me out of trying a long down at 75. I knew there’d be a turning point of some sort.
In this case it was 200 HMA as a perfect confluence point with swing tops on Feb 6 and Feb 28, that was first magnet and short term turnaround, I think.
Month end EURGBP demand and concomitant GBPUSD/GBPJPY selling playing a role also possibly quarter flows with USD/JPY demand firmly in the mix (e.g. EURUSD also sliding). The monthly/quarter aspects makes it harder to assess the medium term outlook. I must say though that cable has been my favorite (GBPJPY in particular) for quite a while now as the intraday moves both long and short provide lots of opportunity. One can be core long or short and collect a hundred pips or more off 5/15 min daily. Of course intraday can become a weekly or month long play as with Yen long in February with GBPJPY moving 1000 pips. Not sure about the long term outlook but content to collect cable pips both long and short as an equal opportunity employer!
This is a big move for the pound and it’s out in front of the pack. Lot’s in the mix as you say Peter.
Re your longer term perspective Ryan, I know people who have been holding since around 1.30. It was rebuffed at 1.36 several times last year but cracked it this year. The big question now is if it can regain the January high and crack that too. Time will tell eh?
The trend has been really strong if you look how it’s come off the 1.20 lows. That’s even surprised me. It’s been a mixture of USD weakness and Brexit clearing the main hurdles put in front of it. With the BOE likely on the path of rate hikes, there’s still a lot of catching up to do. The real Brexit test will come with the trade and equivalence stuff. That will pretty much finish the main Brexit trade.
I also was thinking about 1.4070 but the move was so decisive that I decided to stay away Now see that was mistaken. Planning to grab it at 1.3990 if it gives, have some doubts.