It’s always a dangerous game trying to pick interim bottoms after big trend moves but the risk-reward is very clear and very rewarding. That is again the case with the current set-up in cable and I’m starting to build a long position for a move to 1.37 and above. I have exited my EUR/GBP longs and will concentrate on this new trade for a few days and see how we go.
My main reason is based on flow and positioning information. Real money short GBP positions are reportedly at record highs and with holiday time now upon us, liquidity will be reduced and traders will be nervous.
A perfect formula for aggressive short-covering imho and I feel that if we break above 1.32 then we may see a sharp increase in bullish momentum to take us to 1.35 quick sharp.
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