Cable double top at WM3/ 1.31. A couple of things to be aware of – inflation data out of UK today and Carney speaking. I am cautious of selling the top – USD is very bearish. Plus Carney could say anything. Getting in with a stop at break even before the news is risky though an option.
Alternatively, a lower low after the double top with a plan to sell the pull back OR scalp it down to support on M1 is certainly the more conservative trade. With beta being so low conservative makes sense though I leave that to you.
As far as GBPJPY is concerned, one more move up before a big drop would be nice. GBPAUD would be great with a weak Pound outcome.
All eyes on inflation data, Carney and retail sales later this week. All very important as they lead to possible hiking and tapering of their asset buying program out of the BOE – this is why Carney’s speech is so important today. If he comes out guns blazing and gives the market any reason to believe in a move at the August meeting or one soon after that then prices on Gilts are going to drop. Of course, if he is dovish then prices on Gilts are going to rise. Remaining data dependent is also a likely outcome.