Daily Brief: Cable at the Crossroads
Sterling remains resilient above 1.2420 despite BoE cautiousness. Here's why I'm looking for a liquidity sweep below the Asian low.
Today's focus is squarely on the Sterling. Despite a relatively quiet economic calendar for the next 48 hours, the price action on GBPUSD is telling a story of institutional accumulation. We've seen three failed attempts to break below the 1.2400 handle, each met with aggressive buy-side liquidity.
The Setup
I'm watching the 1.2420 - 1.2440 range. We have a clear 'Fair Value Gap' on the 4-hour chart that needs to be filled. My bias is bullish for the session, but only if we see a clean sweep of the early London lows to clear out the retail stops before the New York crossover.
Risk Watch
The primary risk today is the US Gilt auction later this afternoon. If we see a spike in US yields, the DXY will catch a bid, which could invalidate our Cable long idea. Keep your stops tight and remember: no trade is also a trade.