Short Sterling Tactics

Okay, so just in case my short Sterling bias is right, let's start commiting some tactics to paper.

We'll take the 'Yippon' first as it looks to me like this pair might be the first to fall...

GBPJPY


The key signs for me here are the MACD divergence and the fact that the pair hasn't managed to re-challenge the highs of last week; it is currently hemmed in between 1H 62 and 144emas.

So what I am thinking is that if it can close a nice big bearish 1H candle below the 1H 200 and horizontal support at 136.36, I would be tempted to short it, targetting the 1H 800sma.

GBPCHF

As I said in last Thursday's post, I just don't see any more near-term upside potential in this pair, and because the recent retracement wasn't preceded by MACD divergence on the Daily charts, I can't help feeling that there is still plenty of appetite to the downside.

But, what a consolidation ! I've pasted a 4H chart because I couldn't show the size of the consolidation box on a 1H chart.

Here I would take a big, convicted 1H candle closing below the 200sma, rising support and - unless all the Sterling crosses were falling together - horizontal support at 1.6361.

My target would be next horizontal support at 1.57 for ... a lot of pips.

GBPUSD

Finally, let's look at the major...

What I note here is that whilst Cable has observed sloping resistance religeously, it's wandered through my shorter term rising support line as it's consolidation goes on .... and on.

So here it's the horizontal support at 1.4044 that must be taken out to provoke a short entry, which would target the lowest of lows at 1.35.

When ?

Since I may well be wrong on direction, timing is an even bigger ask to determine, but whilst GBPJPY could go at any time, it may be that some big news will be required to force the breakouts I'm hoping for in the other pairs. I also think it is most likely to occur when the maximum number of market participants are in the game - so early NY session is, for me, the most likely scenario. With the first observation in mind I note that the dreaded NFP Friday is hoving back into view...

... but I do hope that they trigger before then.