31 year low for the GBP (July 9)

It was in 1985 when the GBP was trading at current levels (1,2950). On the other hand during January 2009 it was trading 500 pips higher and once again during June 2001. The BOE is taking steps to support the British economy and an interest rate decrease from 0,50% to 0,25% is expected on Thursday. GBP devaluation is beneficial for UK exporters, incoming Tourism and real estate investments. Travelling will get more expensive for British people and so will purchasing of imported goods.The GBP remains under pressure and the currency lost 406 pips last week. Trading the GBP pairs is going to be “relatively” easy. We wait for retracements and we go short with a preference for the Gbp/Usd and Gbp/Aud. People familiar with the other pairs could also short the Gbp/Nzd and long the Eur/Gbp. I will avoid the Gbp/Jpy (and the JPY pairs) because I am uncertain about the BOJ intentions.

The Eur/Usd is ranging but remains under the Weekly DeMark lines and the emas that are now crossing to the down side. Shorts from 1,12 and longs from 1,09 looks like a good strategy for the pair.

Aud/Usd closed with a profit of 119 pips and will soon test 0,76 level (where my take profit is waiting). Some reaction is expected at 0,7650 but I think the pair will finally manage to break those resistance levels and continue higher, well above 0,78.

Eur/Jpy just like the Gbp/Jpy remain under pressure and display notable losses but I am concerned with this Jpy strength. Investors consider the Jpy as a safe haven despite the negative interest rate. The BOJ is certainly not happy with this strength that is strongly affecting their exports and could take action at any time (assisted by other forces).

​Eur/Aud and Gbp/Aud are my favorites for shorts. They have space below them before a level of support is met. I will prefer to see some retracements before going short.

Usd/Jpy lost some 200 pips this week and could easily re-test support at 0,99. I have longs on the pair that are under water and I am not very happy with this Jpy strengthening. I expect a reversal to take place sooner or later but will not take any additional trades.

Usd/Cad closed with a profit of 123 pips, mainly because of a decrease in Oil price that closed the week at 45,19 (compared to 50 some days ago). The pair is ranging and gave me the opportunity to take a quick trade during the week and open an additional short at a better price.

The important news for the week are the GBP interest rate announcement on Thursday and the speech from BOE Gov Carney on Friday in Toronto.

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