We have a battle going in this pair and it’s between the strength of the US Dollar caused by “inflation concerned”/”oil weakening”, versus the “inflation concerned” strength of the Pound. Now, the Greenback has been strengthening across the board this past week, but Cable kicked butt this morning as CPI and RPI came out higher than expected.
So, where’s a currency pair to go? Well, the “fX-factor” (you like that…”f-X-factor?”) for tomorrow is the employment data coming out of England at 4:30 am. And I say “fX-factor” because there was a report of Tony Blair letting the cat out of the bag that tomorrow’s employment report would disappoint.
Tsk…Tsk…Tony…So, I’m looking for a short play, and we may even see the pair move lower in anticipation for the report. So, the sooner we get in the better, but let’s keep a tight stop just in case. Of course, we’ll have a long trade prepared because you may never know what may happen in the forex markets…here it goes:
- Long GBP/USD at 1.8750, stop at 1.8730, pt1 at 1.8780, pt2 at 1.8800
- Short GBP/USD at 1.8700 stop at 1.8725, pt1 at 1.8670, pt2 at 1.8640