Wiser to Sit on The Fence For GBPUSD
As the saying goes, " It is unattractive or unprofitable to be attracted to a currency pair especially when it is unclear"
It was just about a week ago when all the odds were tilted in the favor of Theresa May winning the elections with a majority parliament, yet the cliché "expect the unexpected holds true.
Many GBPUSD bulls were ran over when news of the hung parliament broke. GBPUSD dropped from 1.2950 to 1.2600. That's a 350 pip drop in a day.
For those who have traded the GBPUSD for a long while, 350 pip used to be a normal daily range for the pair. But in recent times, such occurrence is low.
Then over the last week, more members of the BOE committee favored a rate hike even though the final decision was to hold the rates the same.
Again, GBPUSD bears were again run over cos it deviated from what most have thought. The argument was that the US did increase the rate by 25 bps.
So again the GBPUSD was trapped in a tight range between 1.2600 and 1.2770
Brexit talks start tomorrow and it's anybody's guess where we are heading for.
Bracing for 3 scenarios in price action to occur.
1. Break 1.2630 to continue the downtrend.
2. Retest 1.2890 before breaking down
3. Break 1.2890 and start an uptrend.
Thus in conclusion 1.2890 is a MAJOR TURNING POINT.
It was just about a week ago when all the odds were tilted in the favor of Theresa May winning the elections with a majority parliament, yet the cliché "expect the unexpected holds true.
Many GBPUSD bulls were ran over when news of the hung parliament broke. GBPUSD dropped from 1.2950 to 1.2600. That's a 350 pip drop in a day.
For those who have traded the GBPUSD for a long while, 350 pip used to be a normal daily range for the pair. But in recent times, such occurrence is low.
Then over the last week, more members of the BOE committee favored a rate hike even though the final decision was to hold the rates the same.
Again, GBPUSD bears were again run over cos it deviated from what most have thought. The argument was that the US did increase the rate by 25 bps.
So again the GBPUSD was trapped in a tight range between 1.2600 and 1.2770
Brexit talks start tomorrow and it's anybody's guess where we are heading for.
Bracing for 3 scenarios in price action to occur.
1. Break 1.2630 to continue the downtrend.
2. Retest 1.2890 before breaking down
3. Break 1.2890 and start an uptrend.
Thus in conclusion 1.2890 is a MAJOR TURNING POINT.
Comment:
The GBPUSD has broken below 1.2630 but it never did close below it . Revelation Trading has chosen not to trade the GBPUSD in lieu of the fact that it has been susceptible to the comments by the BOE committee members as reflected by the spikes over the last 2 days. One dovish outlook from BOE governor Carney and one hawkish view from Hollande.
Comment:
Looks like out of the 3 scenarios the third one played out. GBPUSD did indeed break above 1.2890 to launch an uptrend stalling at 1.2971 It was only on the 23rd Jun when BOE commented that he was not for hiking interest rates while his speech last night had him mentioning that he must raise his bank rates soon. What a change of tune in a short span of 6 days. Amazing