The difficulty in positioning on the retrace leg is that clearing 1.15xx had me bursting with curiosity. After some conversations in the right places, the flow is explained...
An urgent matter that requires a complete understanding of what happens when a capitulates to pressure from health and society and allows the Government to take full control of the monetary supply taps. Rishi Sunak asked for the moon and it's surprising how often it's given. Politicians always make the most out of a crisis, Johnson, Sunak and everyone inbetween have left dealers in complete silence. Of course it starts off as "temporary monetary scaffolding", although with no one at the BOE to challenge the maintenance costs of this borrowing now that Carney has been replaced (btw which will soar in the coming years) the UK is in incredibly rough shape as we enter into a monetary crisis. A Downing Street / Threadneedle Street combo in attempt to bring out the big guns, although its too little too late.
Brexit is coming in a few months, the path to pleasure for protectionism never leads to glory! The amount of intervention is unbelievable, my eyes have popped. Con artists know that the bolder they make the lie, the more convincing it becomes. From a strictly perspective, all those with a background in economics will know that Sterling must devalue further in order to soften the devastating damage which is coming from lack of access to goods in the short-term. Whether you are a Brexiteer, or a remainer, one thing for sure is that access to markets will be hurt in the short-term. It takes no less than 5 more years for the UK to establish the same deals it currently has.
A page has been turned on the Johnson health front after positive updates that he has left ICU: For the first time people are seeing Johnson returning as a great emperor. Masses swallowing the story hook, line and sinker!! Just think - if 1.25xx resistance holds and buyers fail to break it will be a textbook blind to psychology retrace!
There will be headwinds to this move as the US set out on to conquer artificial USD devaluation. The issue is, if you sell Dollars where else are you going park? In the UK? ...really? You get the point. Wasting valuable time digging for opportunities, then we have a high quality item right here! Just mentally add up the cost of having UK exposure in this environment and then think of the inner zen you can find without having the pursuit of a bargain that's not really a bargain because there is still so much more economic pain to come.
On the technical side, we are sitting inside a 1.25 - 1.20 range in the immediate term. After clearing the 1.15 target is has unlocked the door towards the next barrier at 1.10. Those with an eagle eye will be tracking this highs strategically as another rush to USD via further panic on the virus front and shortages and with Brexit still to come a leg from 1.25 => 1.10 is in play over the coming weeks if things go tits up for the UK (very possible!).
Thanks as usual for keeping all the support coming with likes and comments, we are sitting at key value levels to start working the sell-side. Jump into the comments with your views, charts and questions!