Watching Cable for a Retest

Good morning forex friends!  GBP/USD has been in consolidation mode for a couple of months now,  but we finally got a breakout last week.  Will we see a move higher?

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GBP/USD 4 hr forex chart

GBP/USD 4 hr forex chart

Today, I’ve got a straight forward idea to go long on Cable on a pull back. As I previously mentioned, the pair has been ranging between 1.5900 – 1.6250 since the beginning of October and last week we saw a break of the top of that range on broad Sterling strength. The UK has been one of the strongest economies this year among the majors, and with the outlook continuing to look pretty rosy from here, this breakout may be the real deal.

Now I’m going into “watch mode” for now as this week’s forex calendar is packed with tier 1 events, notably the Bank of England’s monetary policy statement and US jobs data. We’ll probably see no changes to policy from the MPC and positive rhetoric on the UK economy, but the crapshoot is the US jobs data. A December Taper from the Federal Reserve is still in the realm of possibility and this event could be the key as to which way they may decide. Needless to say, both events could be volatile, probably the last big ones for 2013.

So, I’ll be watching Cable for a buy around 1.6250 if the story and market behavior supports a further rally higher, and until then, I’ll keep my eyes open for some short-term opportunities; revisiting my my USD/CHF short idea may not be a idea!

For now, stay tuned for my observations and updates by following me on Twitter and Facebook!

  • rehmatkhan

    i think head and shoulder is also forming, don’t you it will reverse and could come to 1.6240 or 1.6240 if i am wrong please correct me i am new trader

    • Pipcrawler

      Hey rehmatkhan, not sure what you’re trying to ask but I think you’re asking if I think it’ll come down to 1.6240. To be honest, I don’t know, but if it does, I think it would be a chance to get in this trend higher at a better price IF the fundamental drivers of this move doesn’t change. I don’t really try to predict the markets (no one can); I just go with the the flow and high probability scenarios, try to be prepared and create trades with good potential return-on-risk. That’s all any of us can do really. I hope this helps!

      • rehmatkhan

        sorry for my bad English actually i was trying to say that at GBP 4H chart Head and Shoulder pattern is forming if this pattern forms then it will trigger reversal and GBP can easily hit 1.6250 or little bit bellow this level

  • ForExchange

    Hi Pipcrawler!

    Your analysis go in the right direction at the moment:-) You mentioned the US Job data and the Bank of England. Can you please tell when do they come out and how do you get this info the ASAP when they publish it? I do not know the best canals until now. Thanks and further luck with the pips

  • ForExchange

    Hi again, Pipcrawler!

    I am not sure about something. If I buy GBP in a currency pair, does it make sense to sell GBP at the same time in another currency pair? To show it with an example: GBP/USD long as your write in the article, but for a long term plan I made short GBP/NZD. Of course the USD is not the same with the NZD in theory, but I do no know what is the probability that GBP is gonna rise in one pair and at the same time fall down a lot in another pair. Can you give an advice for this example?

    Thanks,
    ForExchange

  • terry shead

    Thanks for the information on the new york 5 day charts I am going with Axicorp but just seems a long way to trade from love your site and the comments.

    Terry Shead

  • ForExchange

    Do you still believe Pipcrawler in this trade?

    Thanks

  • adedayo

    i will like to see more market action.