I have been looking for Sterling to find support around 1.5850 because that area was respected several times in the past 20 years. But today is a different story. Incredible as it seems, we were at 1.75 just 4 days back, and today’s low was 1.5260. That is a cool 22 BIG FIGURES down. It reminds me of Black Wednesday. As I was repeatedly saying, buying at 1.5850 is not a recommendation for short term traders. It is a recommendation for corporate managers because they have hedging needs, and have a longer term perspective. Even for them, the damage is severe, and if they have not already locked into a trade at that level, they are better advised to wait. As I have explained in the attached chart, getting above 1.5850 now needs help from the Central Bank.
Here is yesterday’s chart!
do you expect this one way trafic in FX should be reversed sooner for a longer term rally again?
GBP looks like finding some base around 1.53/54 levels….
waiting for your new post on GBP
There is a lot of volatility in the market, and Sterling could run to around 1.6360. But the downtrend is not over yet, and I would be happy to exit longs on this rally.
thanks for your view, I closed all my long in GBP at 1.65.