Pick of the Day: GBP/USD

I couldn’t resist doing another pick on the GBP/USD with such a nice technical setup. Fundamentally, we saw a strong drop in the pair due to inline results from manufacturing and industrial data from the UK, and rising inflation expectations from the US. Of course, we saw a retracement on profit taking after the move, so what’s next for this volatile pair? Well, we have the Bank of England rate decision tomorrow morning at 7:00 am EST with the market forecasting no change. In the upcoming euro session, little movement is predicted – probably due to traders waiting on the sidelines until tomorrow morning. If there is a surprise change we could possibly a potential +100 pips. Until then, I’m going to stick with a short play on the pair and I’ll have a long trade ready in case of a surprise raise in interest rates from the BoE…

Short GBP/USD at 1.8850, stop at 1.8875, pt1 at 1.8830, pt2 at 1.8770

Long GBP/USD at 1.8900 stop at 1.8880, pt1 at 1.8930, pt2 at 1.8960