ridethepig | GBP Market Commentary 2020.01.09

A good time to update the Cable chart as we approach the first macro driven event risk of the year with NFP. As mentioned a few times the range we are trading is crystal clear with 1.33xx highs and 1.31xx lows. While the market is holding the key support at the lows, I maintain a view that a correction back towards the highs is both corrective and necessary to allow positioning for Brexit impact leg while the risk to the thesis comes from a break below the lows in the range and reassessment is only required should we break below.

I therefore look to sell the strength back towards 1.33 - 1.35 which will be enough to cap the highs for 2020. Should we see any strength extend in the short-term it will be a superb selling opportunity for those interested in adding weight to the in-house macro view. For those wanting to track the large swing we have been trading since the UK elections I would recommend the following diagrams:

GBPUSD

GBPAUD

EURGBP

UK markets pricing a Conservative majority as a "positive resolution" to Brexit is complacent and allows us an opportunity to capture those out of position and mis-pricing UK market access beyond 2020. To date we have traded a tremendous amount of conjecture around the Brexit chapter, yet many are quickly to forget we are yet to trade the "fact" leg.

...Best of luck to all those looking to trade NFP, a clean and simple spike back to the top of the short-term range in play for Cable. As usual thanks for keeping your support coming with likes and comments !!!

Komentarz:

I see...well, that was quick. Very dovish Carney on the wires and sending Pound lower. Important to note it is only a game changer if we lose 1.30xx today, otherwise range can still extend 1.30xx-1.33xx.

If we lose 1.30xx today then we are getting loud hints that we are already in the middle of the Brexit fact leg from the diagram here:

Komentarz:

As long as 1.300x holds we can remain in the same wide range.