Right now with increased Gbp volatility likely traders are thinking in short term swings.
The most recent has been sells, there is now a pause - and for good reason.
PM May is going to EU today, the political declaration was to be published early this week - but that has been put on hold - and the players have gone into the ātunnelā (i.e. no leaks).
Most likely reason is choreography - there will be wording in the declaration that will offer something to the Brexiteers and even possibly the DUP, the timing will help the PM on her sales mission in Parliament.
The DUP are coming under pressure in NI from the business community and also from Farmers Union - traditionally this is an area of support for that party.
By coincidence the DUP are holding their party conference this weekend - will be addressed by Brexiteer Boris Johnson and remainer UK Fin Minister, Hammond.
The chances therefore are on the plus side for GBP in short term.
Hi,
there are easier currency pairs to trade at the moment then anything with GBP in. You can get wild swings when for example a minister resigns, Or an EU member says something. Thatās difficult to control with a trade, created huge spikes and is more like gambling.
Just my thoughts.
Aye, the set up was staged Monday - the news initially scheduled for Tue evening - held back until after PM visit to EU and return to UK.
As soon as I saw the news delay and the lack of info (the tunnel) it became obvious the publication was being choreographed to help the sales pitch in parliament (to follow later today).
Having said all that I would be inclined to take profit right now - there will be much arguing over the weekend, Monday before a clearer picture could emerge.
See how this GBP position works out come Friday close of play. Iām quite content shorting the GBP thus farā¦ targetting c.150 pips to the down side at roughly 1.270XX
Friday close might be a little early for the selling.
Spain can cause a problem but they are unlikely to make any more comments ahead of Sat meeting May/Juncker, so Sundayās EU Summit would be their platform.
Thereās been nothing from Spainās PM Mr Sanchez since his telephone call with UK PM, so that offers a hint of positivity for GBP.
Not much else likely before Sunday to move GBP back down, banks would like to keep it up (bull flag) - leaves plenty of room for selling if Spain or UK cabinet resignations causes waves - or a little more buying if all goes well on Sunday.
(The likelihood of resignations has diminished now that today is almost over.)
Still plenty of selling and negativity left for GBP but might just take a little longer, good luck Jezz.
Thanks P, I was counting my eggs before the chicken came along this morning, price whipped down 100 pips into my profit zone within seconds of placing the position this morning, I actually thought it was a platform error - but as youāll see it was immediately corrected minutes after the hammer came down!
Iām a sucker for the 50% retrace, as youāll no doubt have gathered by now
Also a lesson that you should read postsā¦ I was short
And for what itās worth, had I have been long, a stop would have been very much useless, slippage would have been immense.
Also my stops are typically anywhere between 50 and 150 pips, so damage limitation. Iām not one of the players here who use 20 pip stops and get excited by an engulfing candle - they can play all they want, and they will get burnt too
jorg, you are right re anything can happen, itās good to get a sense of what is likely to happen.
Politics is a big game but politicians are actually quite predictable and on the back of that itās possible to predict how they will act and on the back of that itās possible to get a handle on Market reaction.
I mentioned back 2 weeks ago the likely reaction of Pres Trump on Saudi noises on trying to get oil prices up, and you can see how WTI has behaved since.
I would say trading in such special circumstances is more gambling than trading- I just remember the big meeting in Davos when Trump said in his speach āhe wants a strong dollarā everyybody who observed the meeting knows what happened some seconds later to EUR/USDā¦ i think short term thinking on intra day basis like this has priority,nobody knows whats going to happen with the Spaniards concerning Gibraltar and so on, just fancy whats going to happen when they decide to deploy a sea blockade around the rockā¦- I read a good strategy for such dangerous periods: have a special account only for these situations, you just fund the account with the money you are willing to loose and thats your stake. So the "normal"trading account is not affected.
Best we can do is figure what the market thinks - long term and short term and then go with that.
The market expects the Spanish to vote with the 26 on Sunday, if not then GBP is a sell.
You mention Pres Trump and Davos - the day before his Treasury secretary at a presser said a weaker dollar is good for us - usdx fell around 1%.
Next day Pres Trump first said I donāt like to talk about usd but āultimately I want to see a strong usdā since it reflects a strong economy (Jan25 2018)
Here is the USDX - arrowed on the Presidentās comment.
- I read a good strategy for such dangerous periods: have a special account only for these situations, you just fund the account with the money you are willing to loose and thats your stake. So the "normal"trading account is not affected.
