There has been something unconvincing about the GBP in recent weeks and I feel that the big bull run, which has lasted now for 30 months, may be about to end. I have no idea what possible black swan event might send the pound tumbling, but my radar has been pinged and I’m looking to trade from the short side.
Cable: Short-term target at 1.5340/50 was achieved last night and I’d expect this level to now provide healthy resistance.
EUR/GBP: It’s difficult to be bullish EUR against any other currency in the current environment, but this pair is heavily oversold on longer-term time-frames. Prefer to look elsewhere for my GBP short trade.
GBP/JPY: USD/JPY still looks reasonably buoyant whilst above 122.25 but if we start closing below 122.00 on a regular basis, and if the cross can form a strong short-term top below 190, then this pair will start to look very interesting indeed.
GBP/AUD: This is still my preferred short trade. The AUD/USD does not have enough momentum to hold below 70 cents and GBP/AUD is looking toppy now towards 2.1500 on the dailies.