The pair seems to be climbing already prior to the actual interest rate statement. I’ll have to adjust my entry levels! I’ll keep ya’ll informed. Be sure to follow my Twitter or Facebook page for real-time updates!
It may not be the 4th of July anymore, but I’m pretty sure we have more fireworks in store for us today! Well, at least on the charts.
On the 15-minute time frame, we see that GBP/USD has just been consolidating since the latter part of yesterday’s New York session up until today’s Asian session. Is it just me? Or do you feel that we’ll see a breakout on GBP/USD too?
I think the upcoming Bank of England (BOE) interest rate decision can serve as the catalyst for the breakout. The great thing about my trade idea is that it doesn’t matter how the event pans out as I have a trade for any scenario.
Forex Gump actually wrote an excellent piece on the upcoming BOE event. You should check it out.
Moving on… If the BOE decides to increase their asset purchase facility and Cable falls, then I have short trade. If the BOE chooses to sit on its hands and NOT do anything and Cable breaks out higher then I also have a long trade.
Specifically, I’m planning to go long when the price trades higher, around 1.5620, and take profit somewhere near this week’s highs at 1.5720. However, if a downside break happens, I’ll short GBP/USD when it closes below yesterday’s low at 1.5570 and probably aim for a 100-pip trade.
Here’s a recap of my straddle trade:
Long at 1.5620 with SL at 1.5570 and PT 1.5720 or Short at 1.5570 with SL at 1.5620 and PT at 1.5470.
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