Closed the GBP:USD short with a nice profit... I'm thinking sell on the rumor buy on the news will occur again this week with the GBP rate statement, in a big way, unless something absolutely earth shattering happens with the MPC rate statement on Thursday. A 100 bps cut seems baked in already, but who knows, I'll stand aside for now.
I may go short again if there's a jump on Thursday from sell on the rumor buy on the news vis-a-vis the rate statement and build up a short position in advance of Friday's and next weeks economic reports.
Things to keep in mind if you stay short GBP through the rate statement
1) Traders are overwhelming short GBP, which provides some upside support
2) Giant equity losses yesterday, probably stoking another very short term dead cat bounce
3) 500 pip moves becoming commonplace in GBP:USD, keep your gearing low and your stops wide
4) Rate cuts are being baked into the pair as we speak, it will be risk aversion that will drive the GBP:USD going forward
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