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7 am EST today is a major event risk. BOE is expected to extend QE about 50 billion pounds. Traders have already priced in this 50 billion pound extension decision due to the bad 3rd quarter GDP. IF BOE decides to pause due to better economic data such as service PMI, expect GBP cross to rally tremendously. If they decide to extend QE, then first knee jerk reaction is probably GBP selling, but for the next days, GBP will recover very well and more based on the history of past several QE announcement.
Assuming if we will range trade between 148.7 - 150.5 for the rest of the day before BOE event, my trade plan is as follows:
Long at 150.5 (today's high), stop loss 148.6 (today's low), target 153.5
This trade is based on the idea that if BOE decides to "pause" APP, Geppy will rally a lot.
Good luck.
Last edited by cmellon; 11-05-2009 at 02:22 AM..
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