I mentioned this yesterday and I must disclose that I did take a small short position myself (I am now short eur/jpy, short eur/gbp and short aud/usd). There was a spike high at .9300 last week and my stop is now above there. The major 61.8% Fibo resistance was at .9265 and this level has held on three occasions now, if you excuse the blip above it in thin early Sydney markets. Market sentiment has been very negative towards the pound in recent times but if this changes then I’d expect to see a significant move lower in this pair, back towards .85 at least and possibly lower. Also my information is that most of the move higher in this pair has been driven by speculation so if the market is now long, we might be in for a nasty turn.
I’m of course not 100% sure whether my timing is correct or not but the risk/reward is compelling so I think it’s a trade worth considering.
