- Technicals are on the chart, the , S/R Levels and Measures of Trend.
- The pair is trading below the 200 Day MA and the Long Term at 1.56600. Typically, short positions are sought with this in mind.
- If today's daily candle close is , then the formation becomes an at 52400 Resistance.
Fundamentals and Market Conditions:
- Last week's dovish turn from the BoE makes sense in light of upcoming headwinds facing the UK.
- First, significant front-loaded fiscal consolidation is likely to weigh on growth.
- Second, the Brexit debate will heat up soon and potentially deter foreign portfolio and direct investment flows into the country.
- This is particularly problematic given the UK's large current account deficit.
- Finally, underlying sources of labour market health, such as hours worked and weekly , are turning.
- The main risk to this trade is a resurgence in UK economic data.
- Regardless of last week's downtick in economic data, King Dollar has held strong, resorting to a range rather than a severe correction in the majors.
- The Fed is currently more hawkish than the BoE and as we all know and their Fiscal/Monetary Policy are King when it comes to driving currencies.
- Federal Funds currently imply a 70% probability of a rate hike in December. See here.
1.5300 proved to be formidable resistance this week.
Half the position closed and profits booked and Stop Loss amount reduced by half.
Win - Win either way.
Happy about this one.