Cable: Looking susceptible to a downside clean-out?

A lot of traders have been jumping onto the GBP bull train at pretty lofty levels and it’s starting to look a bit toppy. Don’t get me wrong, I’m definitely still in the buy-big-dip camp but I’m starting to think that we might get one. If this pair breaks below 1.6690 then I would not be at all surprised to see some hefty stops going off.

Risk-reward in the short-term would seem to be favouring the bears. Selling now towards 1.6780 with a stop above 1.6830 looking for a test of 1.6690 certainly makes commercial sense.

A sharp break below 1.6690 could be good for 200 pips if the medium-term macros who got in at the wrong levels start panicking.