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 cliche "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 Bank Of England. 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
Brezit talks start Monday and it's anybody's guess where we are heading for. It's going to be sentiment driven.
Bracing for 3 scenarios in price action to occur.
1. Break 1.26 continue the downtrend.
2. Retest 1.2890 before breaking down
3. Break 1.2890 and start an uptrend.
In conclusion 1.2890 will be a MAJOR TURNING POINT to watch.
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 cliche "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 Bank Of England. 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
Brezit talks start Monday and it's anybody's guess where we are heading for. It's going to be sentiment driven.
Bracing for 3 scenarios in price action to occur.
1. Break 1.26 continue the downtrend.
2. Retest 1.2890 before breaking down
3. Break 1.2890 and start an uptrend.
In conclusion 1.2890 will be a MAJOR TURNING POINT to watch.
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.