|UK historical STIR curve from Jan vs real time and spread in red.|
|GBP technical view, Citi Macro surprise middle pane, Stochastics bottom.|
There was also very large volumes in GBP today (possible distribution top?)
|Reuters Matching relative volume|
This week we have important PMIs and I have a feeling that they'll disappoint, especially considering their strength of recent months that sort of momentum will be hard to keep.
Furthermore the aforementioned Credit view is seen here, the GBP vs (UK vs. US) yield curve spreads
|GBP vs GBP model, large divergence occurring now|
As we can see there is a lot of resistance for the GBP and the path of least resistance is lower - plus I don't mind holding long USD at this point, so that's why I'm in GBPUSD shorts as opposed to EURGBP longs.
Here is a quote from a Goldman Trader on today's Moves
"The most widely telegraphed flow of the year later this afternoon and no surprise cross trades softly - aided by the general risk off tone and political instability (although hardly new) in Italy over the weekend. My inclination tells me cross won't collapse from here and if anything we should be looking to reduce longs in sterling at these levels - cable should struggle to break 1.62 while EURGBP, although technically looking vulnerable below 0.8350 has severe snap back risk later today with month end also confusing the issue. We still like sterling but not at these levels and the easiest trade right now feels to observe and wait but risk reward here and now is to be short sterling tactically."
My trade is as follows - Short GBPUSD at market 1.6190. SL on a close above 1.63 with targets around 1.59
In other news.... BTPs had an exciting day lol