Still long cable; Silver leads the charge out of USD
Back in the good old days, if silver made 10% gains then the GBP would follow suit but the times they have a changed! The pound has been lagging the other majors (bar the JPY which is on strike!), and it’s close to major support levels against the EUR and the AUD.
I’m in the money on my medium-term cable trade and I’m happy to stay long for now. If the market can break back above 1.28 then I feel confident that my interim target at 1.32 will be reached. I will only exit the strategy if we break back below 1.2500 again. I am also looking to buy intraday dips hoping for 100 pip rallies to improve the overall position average.
Elsewhere, the AUD/USD has come a long way since the panic selling at 56c and I feel that momentum may start to wane soon. The surges in iron ore and the precious metals have given the Aussie another leg up but I’m wary of more big risk off events. I prefer to look for a comfortable wide range and play the edges of that eg .68-.74 on the outside.
The big EU stimulus deal could have significant ramifications for the EUR/USD exchange rate and I wouldn’t be shorting this pair anytime soon until we get a strong handle on when and where the big money will flow.