I see massive divergence in the recent move “upward” in GBP ( The Great British Pound ).
Fueled by talk of a “possible rate hike” out of the U.K coming “before” any kind of hike in the U.S, the currency pair GBP/USD has skyrocketed in “price” – yet floundered with respect to “strength”.
Coupled with the over all weakness in USD over the past few days, the combination of factors has pushed the pound ( guess where?) yup! Right into a long-term area of overhead resistance.
How much higher can it go?
A better question might be “how much lower” as nothing “forex wise” moves in a straight line for long, and we are pretty stretched here as it is.
I will patiently wait for “at least” a turn on a number of smaller time frames, as well “Kongdication” but in all – it really doesn’t matter. I will get short GBP soon.
After a move of over 1,400 pips ( so in nominal terms the pound has gained 14 cents on USD ) since July – what are the odds it gains another nickel before “retracing” a portion of this massive move?
Slim to none.
Talk about a decent short-term investment return no?
Who cares what the DOW did.
I’m long GPD/CAD – it has broken out of a massive 3 year base (after coming down from 200+) so medium longer term chart wise it has an upside price target some ways higher ?
Great question / point Rolo in that……….readers can now get even a “better understanding” of why / how commod currencies perform vs safe havens.
Ok so…….GBP is kickin ass across the board – but even more so against Commods ( as is EUR in my “insanity trades” )
What does this mean / suggest?
It means the big boys are ditchin the commods. It means “risk off” on the horizon – it means “great work Rolo, and a fantastic trade both technically and more importantly fundamentally.
So…..where’s Kong on future GBP weakness/turn? – Not trading it against the commods!!
GBP can fall vs JPY and USD – and still maintain it’s upward trend vs Commods…..as in times of “risk off” – Commods fall EVEN MORE!
Was just thinking the same today myself. The force is strong with this one so I took only a teensy position. Will wait a week or so to see what gives.
GBP is frothy no question , and also a “ball ripper” vs JPY so…….
Caution is most certainly warranted.