We have many reasons to believe that a bottom is in place for GBPUSD
- Political Risk Premium Priced-Out
Prime Minister May’s compromise deal on the EU Withdrawal Bill increases the probability of its passage, which should lead to risk premium being taken out of UK asset prices. Talks that an additional summit being scheduled may take out some risks associated with the 28-29 EU Summit.
2. Technical Analysis
Bullish candle on close Friday, hammer. It’s a high-risk trade, because of the underlying bear trend, but we have a setup.
The Ratio SPX/FTSE in most of the time leads big moves and right now its point to the upside. Chart shows “SPX/FTSE” VS GBPUSD
This week options are pricing a great probability of GBPUSD trades in 1.342-1.362 range, even the lower boundary of the range is above the current price 1.32800
Not to mention a really good retail sales with all this in mind we like to buy GBPUSD with stops below 1.3130 with an open target!