- The biggest news today is the BOE decision and even though the cut to 0.25% was as expected, there were surprise QE expansion. On top of that, BOE also signalled further easing if necessary. Basically, they have just started. There are still more to come as the economy is contracting based on datas, the central bank is ready to ease more, and the uncertainty really lies on the politics - when are they going to trigger Article 51. All these factors just add on more volatilities to UK and decrease of confident as a nation. This risk off sentiment makes few pairs to be a selection to buy against GBP. We recommend EUR, USD & JPY to be the choices. CHF normally is good, too, however, the intervention from SNB is just too risky and too uncertain for our appetite so we always stay out of CHF if we have other choices. Technically, we have a strong candle today at EUR/GBP providing a very strong buying strength. Of course, we’re almost at 2 years high which will be a strong resistance, however, from weekly perspective, there are still a lot of rooms to go. GBP/USD is also another attractive pair to trade, however, we do not have signal candle to enter now, and we’re at historical low, of course, the Brexit is a historical event and don’t be surprise to see the pair makes “new history”. As for now, USD is strong fundamentally but weak sentimentally, I will probably wait to see until next week as we still have NFP tomorrow. GBP/JPY is another good choice and my personal trade at the moment. These 2 currencies are in an polar opposite position and also the pair has the largest movement which I also put a largest stop loss in accordingly. There are still room to go by the weekly perspective, however, be careful for the BOJ possible intervention and I will see if I need to add on in accordance with the development form both nations.
- The catalyst is the BOE rate decision and expansion of QE
- We’re oversold in all GBP pair but again, since this is a historical event = meaning first time a nation left EURO zone, we are expecting to see new history.
- For a long-term perspective, GBP is going south both in exchange rate and economy. However, don’t forget the finical market is full of speculators, the risk is really the flooring of buyers whenever we reach significant areas. So the best way to deal with it is by having a adequate stop loss range.
- I’ll keep an eye on the development from UK and also any possible intervention from BOJ. If you choose to buy USD & EUR instead, keep an eye on both nations development as well.
- this will be a good mid-term to long-term play and as long as you play it wisely, meaning to have enough range for your stop loss and not scalping (you can always scalp at the news event but not for the daily trade).
Alternatively, you can also pick AUD as we have a very strong strength for AUD now.
SL @ 0.8277
SL @ 139.26
SL @ 1.7702
regardless of the strong candle last week, we couldnt' really break above the high so there is no trade!
as mentioned, we have a strong risk on sentiment now and that caused JPY to be the weaknest currency now, however, in comparason with USD/JPY or AUD/JPY, GBP/JPY still shows a great sign of downtrend momentum and as soon as the sentiment shifts to off, we can see GBP/JPY starts to drop again.
I'm got my second add on in today and also tighten the SL in accordance with hourly chart.
if we're not in GBP/JPY and AUD/NZD , GBP/AUD will definitely be our number one choice. Not only the sentiment and fundament are all in line better with GBP/AUD, the price action also showed more downside strength.
We're looking to get in at the next retracement and if we're flat on AUD & GBP at that time, i'll definitely get in.
If you've chosen this pair last week, you should be in now. I'll put my add on @ 1.6892