After briefly touching $1.64 to start out the year, the Pound's come under pressure the past few weeks as a batch of poor economic data has sparked rumors of continued and perhaps increased easing:
This sharp sell off has brought back into play support at the bottom of the 4 year triangle we've often spoken about:
This pair is getting close to the apex of the triangle now and we'd have preferred to see a breakout at one of the prior contact points. Triangles should resolve before this and not press so close to the apex. That said, we started a small long position yesterday to see if the support holds again and will watch closely for now...
As with the weakness against the US Dollar, the Pound has also given ground to the Euro and that pair has risen right back to the top of a multi year channel and near resistance:
We've also started a [small] short position in $EURGBP to see if the overhead resistance holds.
At this point, both trades are purely technical and speculative; we'll sit tight for a while, watching them and trying not to over think the trade...
long GBPUSD, short EURGBP
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