Cable has been in a range for some time now, I think this is a head and shoulder top.
Look below for more charts and reasons to be short.
Comments
KazimierzFrackowski
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All the data shows that USA is in a lot better shape and faster economic growth than UK. I'm surprised that after GDP at 2.8% (1.5%UK), unemployment dropping to 7.3% (7.6%UK), NFP figure soaring and FOMC turning hawkish the Cable returned to 1.622
UK's growth has been made on housing market with the government's help to buy scheme (20% subsidy for every home buyer). Haven't they learned from the 2007/08 mistake. There is another bubble forming in UK. Lets add enormous 509% (of GDP) deficit in oppose to USA's 104%, and the fact that UK's main trading partner - Euro Zone is in a serious mess and on a verge of collapsing with anti-EU political parties getting stronger and will soon have majority of seats in the European Parliament. GBP can't grow stronger much longer there is just not enough room. It hasn't reached 1.63 yet and I'd be very surprised if it did this year. I'm short since Friday 22nd 1.6195 and will not close this position until 1.57
traderWgun
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Well it dosn't seem like the market cares about those numbers just yet. Timing is everthing.
Personally, I will wait and see what will happen up here. It could be a 3x top or a fake break out.
I will short if we get a bearish sign up here
But I think the market could go higher to 1.63, which is in line with my thoughts about
EURUSD and Dollar Index - which are one final low in the dollar index and high in EURUSD
HughGRection
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Really the most important thing about fundamentals are interest rates, which is just the yield you're getting on cash. It looks like this still may be range bound a little longer, but I still like the downside.
ForceFollower
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I'm still bullish here, but if price fails to make a new high, your scenario is very likely.
traderWgun
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Yes, in an alternative senario we could see it go up to 1.6300 before lower, but I'm willing to risk 80/90 pips on this setup
HughGRection
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Another really important reason to be that it could be finally breaking the range is that after the FOMC minutes today, the U.S. 10 year yield broke above the U.K. 10 year yield for the first time in a few weeks. Interest rate expectations are the strongest driver of currencies so I take that as a really important fundamental clue that the GBP/USD may be topping out.
traderWgun
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Thx for the feedback, I'm ignorante more or less when it comes to fundmental analyis but it seems like you know what you are takling about so I will trust you ;)
UK's growth has been made on housing market with the government's help to buy scheme (20% subsidy for every home buyer). Haven't they learned from the 2007/08 mistake. There is another bubble forming in UK. Lets add enormous 509% (of GDP) deficit in oppose to USA's 104%, and the fact that UK's main trading partner - Euro Zone is in a serious mess and on a verge of collapsing with anti-EU political parties getting stronger and will soon have majority of seats in the European Parliament. GBP can't grow stronger much longer there is just not enough room. It hasn't reached 1.63 yet and I'd be very surprised if it did this year. I'm short since Friday 22nd 1.6195 and will not close this position until 1.57