I am curious what people think about shorting GBP/USD this week. Is the damage already done, or will it go lower this week.
hxxp://marketwatch.com/story/uk-ratings-downgrade-to-weigh-on-pound-2013-02-23
I can’t predict the future, but price looks like it’s going down.
Cable has been in a range the last couple of years between roughly 1.67 and 1.5250. It just broke through the floor of that range with it’s second consecutive weekly big bear candle which had it cross the 61.8% longer term Fibonacci retracement. Although price is going down, the commercials are increasing their numbers of long contracts on the futures market, which is just something I think one should be aware of, not make trading decisions based on.
The 79% retracement is between 1.47 and 1.48, which could mean that there is room to make more money going short. My own belief is that if I were to look for shorts, I would try to identify a bullish re-tracement to short from. I think if we saw a day or two of tepid bullishness, and I noticed a couple of good short reasons, such as divergence or a high formation on the 4 hour with a bullish pin-bar, or a potential bounce off the 20 EMA, I would consider it. Logic says that even for technical traders, the news does not look good for the Pound at the moment. There are probably better opportunities that would seem more logical in the other pairs though.
For me it looks bearish and may paint new lows, but after retracement to 1.5400
I would wait until it reaches the 1.5400 level, the damage has been done temporarily.
We might see a retracement at this stage prior to continue with the trend. Would like to see 1.5251 this week to reload shorts.
Well we see raising of GBPUSD and I’ve lost on it my money…