Looks like the pound is struggling to keep its head above water. From intraday price action it looks like 1.9650 has fallen, but I will hold off on taking that short position until we have some confirmation in a daily close. More than likely, I may just hold off on it until after tomorrow's BoE rate announcement. Taking a short trade ahead of the decision is too much unwarranted risk. There is a good chance the MPC is going to keep rates unchanged; and if that is the case, the 40 percent probability factored into the market of a quarter point cut cut could easily lead to a pop that push spot back up above that former support level. Closing back above 1.9650 could signal a false break and tech traders would likely jump on that oppurtunity for a possible rally.

Let's see how it works. Still have small size short for the long term.

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Anyone here who is contemplating a short on GBP/USD must either have nerves of steel or will be in front of their computer 24/7 to manually get out of the position.

The end of this bear run is near!

What About Medium Term Scenario
.
Gbp/usd Weekly Chart Upward Channel , Has Already Been Broken At
2.000 Level And Thus Usher For A Deeper Correction Toward 1.93 Zone.
.
Isn't It

Hi Simon,

well............... there is no certainty and henceforth when in doubt or unable to decide rationally, this is what i do.....
cut loss on half positions............. mark barrier points that if broken would let go another half and so on...........

in ur case, u need to wait out the rate desicion..... if no cut, we could see a rally back to atleast 9877.......... this is where u bail out on half of ur hard earned....... if it comes back breaking the low of today or current low..... u bail another half....... and so on........ u r only reducing ur risk.... chances of gbp going and challenging the high of last yr are very slims........ when u decide on that, and asking a forex trader, with the whole yr in front of u..... well risk/reward and risk aversion tilt to shorts on gbp/usd.....
henceforth, if everyone thinks the peak on gbp have been achived last yr, we would eventually slide lower and lower over the coming time.......
doesnot necessary means we would never see 2+ again......... we could but again how far........

plus throw in a scenario how fast u require to do the conversion, u can easily add things up..............
as for how far gbp rally could extend, 2.03 and higher agian around 2.06-7 where it would eventually be sold out in masses.......

GL..............

PS::::::::: today's price action points that rate cut has already been priced in to a larger extend.....
only surprise would be no rate cut and a big rally in gbp against all majors..........
R/R is on long gbp just b4 the rate cuts.............

__________________
Patience is virtue. The sooner we learn this all, sooner we can start walking to the bank. Good Luck to all of us—
The trick is to wait the price meet ur limits, instead of one jumping in.. however scalps is a totally different scenario and is not everyone's cup of tea
Disclaimer: I'm not at all suggesting trades when by either posting the graphs, or my entries. You can view it, but in the end you have to use your own logic and approach, as there is no certainty about this uncertain market...

Hello Sledge,

I agree with you.
Hope to see a bullish trend of atleast 7 to 10 days for GBP/USD, after tomorrow's rate announcement by BOE.
Eventhough I think 2008 will be bearish for GBP/USD.

I have a long position at 196.75 (approximately 197.15 in spot). Hope I can make some profit out of it in the next week. But I am sad that tomorrow it's holiday for our exchange in account of Muharam.

What you think about next week's trend?

Regards
Nayantara

Hi,
You mean no chance for an upward trend in the next week also?

regards
Nayantara

I thought it a good idea to zoom out beyond my typical daily chart to get a good feeling for the long-term trend after reading your post. On the weekly chart, it looks like there is some risk in that swing high from December 2004 as a pivot level; but after that, it looks like the long-term move could find its way back to that rising trendline/fib confluence around 1.85/86.

Of course, the BoE can change things for the next couple of weeks if the central bank announces no change and offers up a statement that secures a widening yield differential in favor of the pound for the coming months. Definitely going to be watching this event risk!

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I think the BOE rate decision will be exactly what the market makers will need to hook as many uneducated traders into a rash of short positions as possible.

I won't look so far ahead into next week but tomorrow when the rate decision is close- watch for a huge spike down prior to the announcement. This will catch as many speculators as possible to go short- then you will see the market turn bullish.

The market makers are net long- this rate decision is all they will need to offload as many shorts as demand wants before the eventual rise!
Sledge

what do you mean R/R is on long gbp just b4 the rate cuts.............
??

what is R/R?

Thanks

TM

risk to reward ratio....................

__________________
Patience is virtue. The sooner we learn this all, sooner we can start walking to the bank. Good Luck to all of us—
The trick is to wait the price meet ur limits, instead of one jumping in.. however scalps is a totally different scenario and is not everyone's cup of tea
Disclaimer: I'm not at all suggesting trades when by either posting the graphs, or my entries. You can view it, but in the end you have to use your own logic and approach, as there is no certainty about this uncertain market...

Thank you

care to share your charts on this statement? or the reasoning behind the statment?

I've been short since 9806 on the last run up

Simon i think everything long term is pointing down for the pound with most analysts suggesting 1.8600 is a possibility this year

timing the market isnt easy and the more time progresses the more likelyhood of uk cutting rates.

I think most people realised anything over 2 for the pound was near the peak and A rare combination of carry trade madness and speculation.If you dont change yr money now then maybe wait for blips up but i doubt much over 2.00 will be seen again ,i have 2.0080 on my chart on current trend as possible high but that would depend on everything going in pounds favour.

Pearsonian, I second your opinion on this, and I'm treating any Cable rallies as opportunities to sell the pair. Same goes for GBPJPY. That said, I think both pairs could be in for a bit of a bounce (as I mentioned in previous posts) in the near term. Let's see if the BOE can shake things up...

Thank you, those who have responded to my post.

Unfortunately, my funds are still not liquid, so I still can't trade, but I accept and agree that the rate it doesn't seem likely to go back up much soon. I guess I'll just convert what I've got as soon as I can, hoping that the BoE announcement (in 15 minutes!) doesn't make it dive even further...