FX Play in the Cable

The recent ascent in the British Pound has lifted futures near 1.6800 in June challenging the highs from mid-February. This has been a steady climb since bottoming in July of 13′ but what I find interesting looking at the weekly chart below it appears the line in the sand is just above that level, as every time when futures have approached this price point we’ve failed. While past performance is not indicative of future results I feel scaling into bearish trade at current levels makes sense weighing risk and potential reward.

A settlement above the trend line I drew on the daily chart one should admit he/she is wrong. I have a first objective at the up sloping trend line as seen on the daily chart below that comes in near 1.6575. Another consideration is the greenback has traded lower 5 out of the last 6 days giving up 1.5% dragging prices to oversold levels. If support does hold as it did in mid-March and we get a bounce in the near term to MAs I would expect this to contribute to weakness in other crosses. To be clear I am not calling a bull market in the US dollar nor a bear market in the Pound but rather a trade to play a correction.

Weekly British Pound FX:

British Pound weekly chart for April 11, 2014 - FX
British Pound weekly chart for April 11, 2014

Daily British Pound FX:

British Pound daily chart for April 11, 2014 - FX
British Pound daily chart for April 11, 2014

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As always, I’m here to discuss specifics and give guidance. Shoot me an email…Give me a call… you can reach me at: mbradbard@rcmam.com or 312-870-1653

[typography font=”Cantarell” size=”11″ size_format=”px”]Risk Disclaimer: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities and/ or financial products herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed to be accurate. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results. This report contains research as defined in applicable CFTC regulations. Both RCM Asset Management and the research analyst may have positions in the financial products discussed.[/typography]