The short US Dollar trade and long GBP trade both come from severely overcrowded conditions. Speculative positions were caught off guard by the sharp reversal, which takes nearly a month as we publish this. It resulted in position unwinding.
The GBPUSD Elliott wave structure is approaching a relief bounce. Momentum is diverging already. This signals that the current swing to the downside is mature and has left most price action behind.
We continue to expect more downside after the relief bounce for the cable. The suboptimal Brexit process continues to leave the GBP/xxx pairs especially vulnerable to fundamental news flow. The sharp character of the drop matches that of what we have witnessed in 2008 as well as 2016 in the cable. We expect this to continue for most of 2018.
Patience is the key message at this point. We are getting prepared for a 3-wave bounce. Shorting this may give us a ride into a similar situation that the GBP encountered 2008 and 2016. A big move to the downside may result after the next pullback. We'll stay very alert on this major pair here!
Trade will be activated after a bounce.
The GBPUSD Elliott wave structure is approaching a relief bounce. Momentum is diverging already. This signals that the current swing to the downside is mature and has left most price action behind.
We continue to expect more downside after the relief bounce for the cable. The suboptimal Brexit process continues to leave the GBP/xxx pairs especially vulnerable to fundamental news flow. The sharp character of the drop matches that of what we have witnessed in 2008 as well as 2016 in the cable. We expect this to continue for most of 2018.
Patience is the key message at this point. We are getting prepared for a 3-wave bounce. Shorting this may give us a ride into a similar situation that the GBP encountered 2008 and 2016. A big move to the downside may result after the next pullback. We'll stay very alert on this major pair here!
Trade will be activated after a bounce.
הערה:
Likely to correct further to the upside. Risk inclined traders may want to look into longer-dated put options...
הפקודה בוטלה:
Didn't rebound as expected...