I changed my mind about setting short orders on Cable since price blew past the Fibs and nearby resistance without even looking back. Before reading on, make sure you review my initial short GBP/USD idea first.
I planned on shorting around the 1.3200 area or 61.8% Fib, which is around an area of interest. I thought I already missed the move since the pair turned upon hitting that level and dropped by more than a hundred pips on Friday, but it turns out pound bulls are putting up a stronger fight.
I then thought of shorting at the descending triangle resistance just slightly above the 1.3200 mark, but I wanted to wait for reversal candlesticks as confirmation. After all, pound strength seemed unstoppable after last week’s set of upbeat U.K. economic reports.
While the dollar has been strengthening against majority of its forex rivals, it doesn’t seem to be making much headway against the pound. And with the Jackson Hole Symposium posing a huge event risk towards the end of this week, I’ve decided to just drop my short GBP/USD bias for now and search for a new trade idea instead.
As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.