The British pound has skyrocketed during the week, mainly due to a few blurbs here and there on the news about how the negotiations are going better, and that perhaps a “path to a deal can be seen.” That seems to be a lot to base your trading on, so I suspect that a lot of this is probably due to short covering more than anything else. With that being the case, I would be a bit leery about going long now, because I do recognize that if Brexit is solved and the markets are suddenly going to be in and uptrend, you have plenty of time to enter on pullbacks. As far as selling is concerned, well obviously you can’t do that.
GBP/USD Video 14.10.19
Quite frankly, this is a situation where the market just can’t be touched. The British pound is still technically in a downtrend, so that is something to pay attention to but ultimately it’s going to be far too news driven at this point to put any money to risk. I know that it seems like this could be the trade of the century, and quite frankly it can but that will be later, as soon as we have some type of certainty. Don’t worry about the initial impulsive move higher, or perhaps even the major selloff. Let it come back to you at a much more reasonable price and then participated. That’s how the real money will be made.
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This article was originally posted on FX Empire
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