I'm sure you're all aware that today is a US holiday with the European Central Bank and Bank of England both meeting, and that tomorrow (when we will also be suffering from a lack of volume from t'other side of the pond) we get the payrolls' release. For me, this adds up to a potentially explosive cocktail, with moves that have little to do with technicals possible.
Saying that, yesterday's rally in GBPUSD was something of a mystery to me. Since when did the market take that much notice of a PMI release? I wonder if it may have been some sort of strange twisted "flight to quality" away from the euro.*
Whatever it was, I'm a chart man, and this morning I'm looking at a big reversal pattern in Candlestick analysis in the shape of a "bullish engulfing pattern" on the daily chart. But so far this morning we've seen no follow through, and the intra-day charts suggest that if we fall back through 1.5238, a sell-off will ensue back to 1.5183 then 1.5130 and beyond, eventually targeting 1.5008. This is, after all, in a short-term downtrend still.
In terms of trading, it is an explosive cocktail out there. Be safe, and don't try and hit home runs, because thinly-traded markets can really bite you on the backside.
*There should be some sort of health warning on this paragraph, along the lines of "this is a technician talking fundamentals and should be taken with a pinch of salt!".
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Cable Could Be A Sell, But Only For The Brave!
Published 07/04/2013, 08:20 AM
Updated 03/19/2019, 04:00 AM
Cable Could Be A Sell, But Only For The Brave!
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