I’m long cable and 100 pips out of the money. Not an unusual occurrence by any means as in my experience this is one pair which tends to overshoot expected levels by significant amounts.
But, my confidence levels are receding as I’ve watched and seen the pound continue to slip against the EUR, JPY and AUD and it’s time to put a hard stop in place. The overnight low was around 1.2250 and if we break back below there then I will cut and run.
Elsewhere it looks like the noisy markets are set to continue with big orders either side of USD/JPY keeping it rangebound and overly short positioning in EUR and AUD now mainly unwound.
Any big moves are now likely to be driven by fresh US-China headlines.