For several weeks, the British pound collapsed against the U.S. dollar. Cable undergoes indeed bleak prospects in the United Kingdom and the resumption of bullish U.S. dollar since the FED has indicated it can stop its QE3 faster than expected. But the fall is stopped dead on a major support in weekly data.
An inflection point on the medium term
The GBP / USD reacted immediately to the latest employment figures in the United Kingdom. The unemployment rate of 7.7% has not been reached, indeed stood at 7.8%. The risk of inflation announced by the BoE is also taken into account by the market.
The downward spiral cable was however stopped short on the 1.5234 area which is identified in weekly data. This is the lower limit of a range that includes courses since 2010. As the upper limit or the lower limit is not reached, the trend will remain neutral on a time horizon of medium / long term.
That is why; having lost 1000 pips in a straight line, the establishment of a technical rebound is not excluded. It will be part of an offensive strategy of this type, to quickly cut losses if the recent low were sunk, and rapidly adjust its exposure to 0 if there is a technical rebound.
A first threshold to 1.532 has already been joined. It should be taken for the 1.5393 are achievable in the coming hours. Instead, back in the 1.52 would welcome new annual low with a high probability of achieving at least a “sell off” less than 1.50.