Easy money has already been made in short GBP/USD trade. Now as GBP/USD will approach 1.25 on decent dips, equation will be skewed to help buyers. Even a little positive ( or even less negative ) data will create short squeeze like the one we are witnessing today.
We are still sticking with buying the dip in GBP/USD. Because strong negativity followed by Brexit is abating and to keep the pound below 1.30, we need strong indication that UK economy is faltering rapidly. May be GBP/USD will not run away anywhere soon but 1.28 and 1.34 defines a decent range.
Today’s price action is further validating the case for short dollar trades. We are long EUR/USD, AUD/USD and NZD/USD and today is the perfect time to reduce those exposure by taking some profit. There is will be another rate hike talk which will punish these pairs hard just to make them attractive to buy because Fed will chicken out again.
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