Charles
Short

Cable traders happy to be short as UK keeps circling the drain

FX:GBPUSD   British Pound/U.S. Dollar
197 4 0
Don't fight the trend. That simple. You could try to fade a bounce as profit taking is clearly taking place 1.48 - 1.49, but the trend in sterling is clearly down... across the board. The pair just broke to the downside (well, a few weeks back) out of a multi-year triangle. Now triangles, especially to the downside aren't the most reliable of patterns, imho, but lets assume that it performs at just 30% of it's usual measured move and we could get a target (from breakout price of 1.5735) of 1.4635. At 50% the target is 1.3869 and a full 100% move would target 1. 2002             . I think the 100% target would be pushing it, but 1.3869 (or even nearby 1.4635) seem fairly plausible. Look to fade any rallies would be my best guess here. Obviously, 1.5220/60 would be ideal, but barring that 1.5100/30 looks decent at the moment. The numbers might not jive exactly with the chart above as I was using my Reuters platform for the numbers, which are a bit different from these rates. You can see the original post I made on babypips.com in response to someone (http://forums.babypips.com/gbpusd/52056-stochastic-weekly-chart-heavily-oversold.html)
http://www3.picturepush.com/photo/a/12499966/img/12499966.png
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In early interbank dealing, cable pops to 1.5269 (Reuters dealing), now 1.5224/36...
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Looks like it's about time to short cable as it's risen to that 1.5220/60 zone. Trendline resistance seen 1.5251 and offers 1.5245/50 stopped the rally at 1.5248 (Reuters). Depending on one's risk tolerance shorting here into 1.5250 or 1.5269 is the plan. If you roll with protective stops, stick one 1.5278.
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Cable was bid up to 1.5120 paid on Reuters, but I think it's got more room to correct. I'd take a pass at fading here and keep sights set on 1.5220/60.
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