YRA Harris …last nights Notes From the Underground
May is expected to reveal a more defined Brexit plan but I think the market has already pushed the British pound so low that there’s a greater risk of a pound rally. The significant drop in the British pound since the Brexit vote has led to a FOOTSIE rally of 28%. (Although foreigners who have purchased POUNDS have seen their gains eroded by the currency’s depreciation.) However, before the vote the British currency was severely overvalued relative to its current account deficit. The British current deficit has doubled since the onset of the Great Recession, so ultimately a correction was needed. The weakened currency will help alleviate some of the problems of the current account deficit.
As usual, Yra nailed the price action!
GBP/USD…daily..124.13 is the 50 DMA with resting buy stops over 124.33
BP6H7…daily British Pound Futures show an ORH day, which has Sessions from trading Nation getting all bulled up on CNBC.
GBP/USD...weekly…123.17 is the weekly cash ORH#
Bottom line, I defer to the cash which does not show the same daily ORH pattern,
although I will concede that the weekly has potential and bears watching.
If you’re a technical trader you’d best be looking at more than one chart for confirmation.