GBP H&S on the weekly 15.11.2018.
It looks, bad, it smells bad, it feels bad. No other words. Been talking about what could happen in the room, there’s no real positive to be taken from this Brexit mess. Even if May survives the vote and GBP would come to jump back to 1.30/31 let’s say, there’s enough harm done. As I always try to put myself in the shoes of an investor when the market goes a bit crazy or runs around like headless chicken, I don’t think businesses and investors will feel comfortable with any outcome. I case UK and EU need to go back to table after this Brexit backstop, because that’s the only thing that matters, has been voted down, EU won’t need to water anything down from their side.Uk decided to leave and, business and competition talking, they may give UK’s unity in return for tougher financial services rules. So any deal will cost UK whatever happens from now imo.
But in the immediate, we traders need to prepare for the worst today right now.
Here’s how the longer term looks. Until a few days ago I was planning to buy 1.27-1.2550 with a stop under 1.25 but I will hold off as uncertainty means caution and the longer the pantomime goes, the worse it looks for GBP. Not saying we’re going to break but prepare for a big acceleration if cable would break 1.25/35 as medium model funds may push the buttons. It’s a little presumptuous to call for a target( ok 1.12 if you insist) but it’s the acceleration risk I want to warn against.
Safe travels and happy hunting