Cable has breathed a huge sigh of exhaustion after a heady 3 years… Covid, Trump, Brexit, FED. It’s all happened and this year has given me time to plan and map out the next 6 months.
We are at the same highs of Q1 2018 and having formed a double top it will be interesting to see where we go from here. Personally I’m hoping we will hold this range of 1.36 to 1.42 for the remainder of 2021, if it does I’ll make plenty out of it.
Look at this chart below, we clearly have some consideration to the following…
The absolute line in the sand first tested by the Brexit Article 50 announcement in October 2016 and then the 2020 Covid lockdown announcement is about the 1.14 level.
The pound is then bought successively with an implied volatility of some 2800 points and then sold off to the 1.26 level, sold again and then capped four times at 1.33 before been bought again.
We are 5 months into the the current cycle of this 2016 Q2 range extending it’s duration longer than last time. The catalyst to move money up from this level was way back in 2008 but this bounce was on the back of the shocking credit crunch drop in November 2007 from the heady heights of 2.11 (that was the time to go to Universal and Disney!).
Longer term plays for me will strictly be range bound systems, so far the pound seems to have evaded the value buyers below 1.14 but if we visit there again, you know what I’ll be doing.