Who are those bloody fools backing the Pound?

[magoo]

Since last Friday, market is strongly backing the Pound.
As usual, Pound is gonna lose 300pips in a row very soon.
But who are those bloody foolish buyers, stubbornly willing to lose billions?

[foroz]

Now that's a pretty bold statement.

Maybe you could enlighten the readers as to the reasons why you see a 300 pip drop on the pound.


Regards

[magoo]

With pleasure.
You did notice that the Pound is the only currency that holds firm despite dollar upside momentum (since 72 hours).
I don't see any good reason for that. If dollar keeps bullish trend, then the Pound will lose in 2 hours what it should have lost for 3 days.
Nothing special, Pound always "behaves" like that. When it will occur, Pound will lose ground and stay low for a long time even when other currencies retrace a bit against the dollar. It's always the same.

What I wonder is "how is it possible". Buying Pound now is such a risky bet, who is fool and rich enough to do so??

Let's wait and see when Pound hits 1,73 USD.
And I don't want to hear anyone complaining, because I told you to watch out!
I'm kidding.

Cheers

[magoo]

Foroz,

I didn't intend to be bold. I see an imbalance in GBP/USD pair I already saw many times. Each time, the Pound did collapse in the end.

But as any trader knows, one must not run against the crowd. That's why I don't recommend to enter short now. I only recommend not to buy Pound. It's like walking on thin ice, I can hear it cracking...

[yasirdxb]

May be you should watch the market as a whole. take a look at Gbp/jpy and

Eur/Gbp charts.

Yasir.

[magoo]

Yasir

I didn't say that Pound was only solid against the dollar..

As dollar is strong against all currencies except the Pound, of course, Pound is strong against other currencies. So what?

The point is the correction that will happen as soon as BoE meeting ends, or sooner. Because (you may have understand yet) I don't think Pound has any reason to remain strong. I bet that it'll be the weak currency for the next six months or more. Market still expect BoE to keep rates high. Big mistake from my point of view. And even if indeed BoE doesn't cut, then the interest rate differencial will decrease against USD anyway, unless BoE increases up to 7% or 8%.

I see GBP/USD at 1,60 within six months.

[foroz]

I like fibs and what I did was to place a fib on the daily chart (MT4 Alpari feed) from the low on 20 July of 1.7275 to the high of 1.8499 on 5th September, which gave me a potential retracement at the 78.6% level of around 1.7537.

That's why I suggested your statement was bold without knowing your reasons as my analysis at the time had me expecting a retracement.

It's always interesting to read others' interpretations of the markets.



Regards