Trade Of The Day: GBPUSD To Test 2015 Lows
Fundamental: GBP hit a nine-month low yesterday, as worries that UK growth would not be strong enough to justify an interest rate rise this year, and uncertainties over a possible “Brexit” from Europe also weighed on the currency. Figures showed UK manufacturing growth slowing again in December although other numbers released at the same time showed UK consumer credit grew at its fastest rates in almost a decade in November.
Technical: While 1.4850 caps intraday upside expect a drift lower to retest bids at 1.4565 the 2015 lows.
- We have had a good read on Cable price action into the back end of 2015 see our last post on the set up we were tracking. although we didn’t get an entry trigger we mapped the market move well and feel ready to revisit Cable as our first set up of 2016
- We are now looking for another leg lower in Cable to test and run stops below the 2015 lows of 1.4565, ideally would like to see this move extend to run stops at the 1.45 figure, as per the chart below we would anticipate buyers to emerge into the 1.45/1.455o area for a decent corrective bounce as less experienced money chases the move lower at less than premium entry levels and are forced to cover fueling the anticipated correction.
- Motioning intraday reversal patterns at 1.4550-1.45 risking 100pips targeting a 300pip profit
- Trading Update – Longs from 1.4550 stops to entry, risk free position
For updates on trade of the day set ups and the other trades I am currently monitoring be sure to follow me on Twitter @LFXPatrick