GBPUSD OPEN - 100 PIPS LOWER; UNDERPRICED RISK = SELL PULL BACKSA disappointing open from cable with a bears perspective.
Gapping down 100 pips to 1.435 almost immediately puts my sell limit orders (at 146.5) in "unlikely" territory of being hit this week.
On friday following the $ EMP report cable managed to rally to 1.458 - i was hopeful it would tick a few more pips upward before the slew of selling started as we move further into FOMC and Brexit event Uncertainty territory.
Reason being, i was looking for better/ safer levels to short at - cable at 1.465 is an almost CERTAIN trade (the ones i like) as the next daily support level isnt until 1.443 which means there was over 200 pips of 0 risk equity upside to be collected.
Since we are already trading well below last weeks lows at 1.436, we will likely soon test the daily support level at 1.433 then 1.430.
TRADING STRATEGY:
SELL/ FADE ANY PULL BACKS IN A PYRAMID e.g. 1@1.450, 2@1.456 & 3@1.464!
TPSL is discretionary.. i personally have my stops just above 1.48 (on my current shorts at 1.45as I will be holding until the 23/24th of june (to include the FOMC and BREXIT REF volatility) which at somepoint IMO will yield at least TP1.5x the amount of SL = 250/300pips.
FOMC hike = 1.38 or 700pips;
FOMC Hawkish = 1.41 or 400 pips;
BREXIT uncertainty = 1.40-1 or 400-500pips;
BREXIT YES = < 1.345.
Thus the risks from 1.45 are certainly skewed to the downside for cable (upside for shorts) in my opinion.
Above is my strategy for this week, given it is the last realistic week we will be able to add "risk-cheap" shorts to our portfolios (given FOMC is on the 16th and brexit ref on the 23rd).
BUT given we have already started the week lower, I think the market has finally begun to price in the cheap risk hence the 100 pips lower - you will see in my previous articles i said to short cable anything below 1.45 - which is now 150pips of upside and looking good for more!
