I'm No Longer On The Fence With The British Pound
A lot can happen in the trading world in one week. Last week, I posted about the British Pound,
After spending almost the whole year betting Brexit woes would weaken the pound, traders are now on red alert as the potential for a divorce deal sends sterling flying higher. The U.K. currency jumped the most over two days since 2009 after Thursday’s positive meeting between Prime Minister Boris Johnson and Ireland’s Premier Leo Varadkar.
Now from a big picture standpoint, specifically the monthly chart, price formed a double bottom and is leaving the monthly demand at 1. 2000.
However, on the daily chart, price came into a daily supply today and it the 200 moving average. So come Sunday night, probably Monday during the US Session, I'm going to decide whether to take this set-up short or not. It all depends on the price action on the 1 hr and the 4 hr chart.
Sunday evening, I never went short..I had the opportunity to go short on breakdown on the 4 hr chart, but on this one I went with my gut as the momentum to the upside was definitely against me.
UK Prime Minister Boris Johnson and EU Commission President Jean-Claude Juncker confirmed a Brexit deal has been agreed between UK and EU negotiators this past week, but now Johnson must get the deal approved by the British Parliament. Many traders out there are skeptical the Parliament will approve the deal. You see, the Northern Irish Democratic Unionist Party (DUP) has 10 parliamentary votes and Johnson and the DUP never came to terms in regards of an effective customs border separating Northern Ireland from the rest of Britain.
Going into this weekend, the daily chart looks very bullish.
And despite price hitting some daily supply yesterday,
I think that supply will be short lived. Thus, I'm no longer on the fence with the British Pound. And although I may not go long on the GBP/USD because the US dollar remains strong, I will start looking at the GBP cross pairs, like the GBP/AUD which is just calling my name.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
