AUTOREFRESH 
Sterling selling based on prospect of hung parliament
By Sean Lee || February 28, 2010 at 22:12 GMT
|| 14 comments || Add comment
Cable has fallen 100 pips this morning and it seems that the main drivers have been the UK poll suggesting that Gordon Brown would win a general election with a hung parliament plus some chatter about big M&A flows. None of this will affect the pound in the short term so I think this move might be a bit overdone, notwithstanding the overall bearish sterling sentiment.
Hi Sean
you called the discount rate move as overdone, and you were right on the money
now you called this cable move overdone and you are right again
do you ever take entries on these retraces or is it to dangerous? Seems like you have a trading strategy that doesn’t allow for this?
I am still amazed by your knowledge.
Chris
Hi Chris, stop talking me up or it’ll all end in tears!! I don’t think its too dangerous to jump in when something is overdone but only go in the first time. That’s the easy money. Like cable was a good buy for 50/70 pips thuis morning but now we are back towards the lows I wouldn’t be jumping in. There are always market inefficencies which can be taken advantage of for a quick killing.
Sean, you deserve a lot of credit for the calls you make. You nailed the last RBA meeting, and the impact on aud/usd. How do you think things will play out this time? Rate hike with a little pop to 92c?
G’day JR. I’m not 100% sure what they will do but I think we get a good trading opportunity in the hours after the meeting tomorrow. I’m happy to either sell a big rally or to buy a big dip. I have a sneaking suspicion that AUD/JPY might be the driver for the next big AUD/USD move.
25 bps rate hike, stops get triggered above .9075, runs up to .9150ish or .92 as you say, and then we sell for an easy 150 pip profit. How does that sound JR??
Hey Sean, I think buying around .894 with a goal of .914 (or maybe higher) sounds like a good strategy given that a) Mutual Fund Monday (risk on) is here, and b) we should get a run up into the meeting with the “buy the news” hot money. Jamie likes to always say that you say that currency traders should only trade the edges of the ranges and shouldn’t get chopped up in the middle. If aud/usd is in the middle of a .857-.937 range, then this (because of the potential rba hike, and because of how much money is in hedge fund carry trades) does seem like an exception to that rule. Cheers,
Thanks JR. I’ll watch and see if an hourly base forms around your .8940 preferred entry level and if it does then I’ll join in as I like your logic.
I’ll also stick a gtc order in for aud/jpy for the same reasons. I’ll be sleeping in a little bit, so while I can’t be as precise with either entry as I’d like I do think there’s good reason to be bullish aussie. Cheers!
Houseplants are happy. I like the way you guys are thinking.
With the care you are bestowing on those plants Zeke, I’m beginning to wonder what’s growing in them!!
JR’s crystal ball seems to be in good working order. (.8940)
Hey Zeke, So far so good on the aussie front.
Are you in?
Yeah. I was a tad hasty when London opened, and like you had to nod off. Filled @ .8992 . Should have put in a limit where you mentioned, but it looked like it had legs.
Hopefully some hedgies will carry us from here…