Sterling Capitulation? ... a live example of the offside trap

FOREXCOM:GBPUSD   British Pound / U.S. Dollar
...we have a very interesting idea on the menu today for everyone. This is a very advanced environment and would recommend only those who are experienced to trade this swing position.

=> We are approaching steel resistance once more and it is time to get active on the sell-side in the UK. We have fresh headlines this morning from the political side attempting to continue selling the dream of a second referendum and attempt to remove no-deal from the equation.

=> Unfortunately for those in the UK this is nothing but political fairy-dust and we are set for a massacre ceteris paribus. Markets are positioned on the wrong side and we will need to see a meaningful correction here as reality kicks in and models begin pricing in a no-deal exit once more.

=> We are starting to build a position on the sell-side here, it requires nerves of steel and patience as the noise levels from the mainstream media are guaranteed to be extreme.

=> From a technical perspective, after the neutral session yesterday we saw Asia rally clearing the 200MA and trend line from September, this has 'opened' the door for a cluster of stops at 1.317 which is in the crosshairs.

So how are we going to trade this ?

=> Well we are wanting to trade the exhaustion here when bulls start getting ahead of themselves and like football, begin to trap them offside. We see signs of a fresh top starting to form already and expect the stage to be set over the weekend via the political heads from the UK.

=> Support moves to 1.309 and 1.301, below here unlocks 1.294 and 1.288. Removal of this will trigger the capitulation which is what we are trying to trade here and unlock 1.23.

Best of luck to all those who are trying to position for Brexit or who are already in this live.

Comment: First targets cleared at 1.281 - Well done all those enjoying the ride!!!
Comment: Economic data is only moving in one direction during 2019. Household spending will continue softening, consumers are going to be squeezed via weak wages and little room for credit.
Comment: A shame we never managed to complete all the targets on this move. Nevertheless a quick one-pointer giving us new opportunities to short for better value.

Related Ideas


I have a similar view. GBPUSD D1 Running flat for more downside. checkout the idea detail's for the complete picture.
+3 Reply
Excellent review and analysis. I am in the trade from last week, lets see how it goes.
+2 Reply
ridethepig principaloverprinciple
+1 Reply
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