ridethepig

From Downing Street with Love

Short
FOREXCOM:GBPUSD   British Pound / U.S. Dollar
Here we go again guys you know what to do....same plays from the loading zone...by now I hope most are locked and loaded in full positions.

Unfortunately we have more Brexit politics in play with PM May sending a letter to the EU council asking for an extension this morning.

From good sources the EU will accept on the assumption May can get her deal through Parliament by mid-April, otherwise, we are left with a choice between a long extension into 2020 or a no-deal. It is fair to say any extension seems more or less priced in at this point so not expecting much after the knee-jerk on the headline.

Expecting the Fed to lower the “dots” signalling one hike in 2019 … a “one and done” approach. June seems unlikely now as the Fed has started to focus on inflation to keep equity markets happy.

My base case is for a hike in December meaning the dollar looks underpriced at current levels and with a lingering ECB easing risk premium EURUSD will start the leg lower after we clear Fed and PMIs.
Comment: The technical setup has been damaged, if US PMIs are inline today we might see a very nasty end to the week.
Trade closed: target reached

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