Entry: Sell GBP/USD at market
Target: 1.5300-1.5350 (October 24, 27 lows)
Stop: Above 1.5690/1.5700 (intraday trendline resistance)
This is actually the opposite of my trade from yesterday, as I was looking to buy GBP/USD on a break above 1.5800. However, we saw no such move as the pair remains under pressure from a combination of demand for safe-havens like the US dollar and the absolutely dismal UK economic and interest rate outlook. As a result, it may be worthwhile to stick with this trend and sell the pair, looking for a drop toward 1.5350. If selling GBP/USD at market, stops should be placed above 1.5690/1.5700.
Event risk will pick up for the pair on Wednesday as UK employment figures and the Bank of England's Quarterly Inflation Report will be released. Both of these announcements should have bearish implications for the British pound, but if you're trading on a very short-term basis with tight stops, it may be best to avoid holding positions at this time given the potential pickup in volatility.
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