The GBP tagged a very significant target at 1.6535 to begin the trading week – where some very large position traders would have taken profits – closing their positions.
After a run up during the Asian session, we see that the upside momentum faded and price could not get above the Asian high. As price rolls over we enter short, placing a stop above the Asian high for a better than 5:1 Reward for our Risk to Target 2.
Price moves down but cannot penetrate the Asian session low as the UK session comes to an end and we close the position for modest gains.
Last week in advance of the Jackson Hole Symposium a lot of large EUR short positions were closed. These positions were opened again as the new trading week began and both Draghi and Yellen’s comments had been digested. The market is now pricing in further ECB rate easing with very high probablility for September and extremely high probability within the next couple of months.
Good luck with your trading!
Back tomorrow if we find a trade.
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