15 February 2011

GBP/USD : Doubled Long

  • UK RPI +4.0%, Core +3.0%. Market initial reaction to sell cable to day's lows = low risk entry long.
  • Doubled initial tiny risk at 1.6051. Overall position is now in the money with cable trading at 1.6116 as I write. Even after today's addition, GBP risk is still small.
  • Base rates at 0.5% and inflation at 3% or 4% just does not square off for me. Rate hike expectations will surely build and drive cable higher in time.
  • Next chart point 1.6299. Will buy more on a break.


Taichiseal said...

Took partial profit on today's position at 1.6144. Average in rate on remaining long improved to 1.6091.

Taichiseal said...

"The MPC's-central judgement, under the assumption that Bank Rate increases in line with market expectations, remains that, as the temporary effects of the factors listed above wane, inflation will fall back so that it is about as likely to be above the target as below it two to three years ahead"

Taichiseal said...

Market now pricing in May rate hike.