3 Reasons Why Cable Is A Good-Risk Reward Short Trade
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3 Reasons Why Cable Is A Good-Risk Reward Short Trade

GBP/USD is on the back foot, falling even below 1.57 as the dovish BOE inflation report weighs on the pound.

What’s next for cable? The team at SocGen provides 3 reasons why cable is a good risk reward short trade.

Here is their view, courtesy of eFXnews:

Cable is a good risk-reward short for a number of reasons, argues SocGen.

Firstly, the UK MPC will be hiking when the growth rate has already peaked.

Secondly, growth in late 2015 and through 2016 will be affected by the need to tighten fiscal policy.

And thirdly, the UK is more sensitive to European stagnation by virtue of proximity if nothing else. Political uncertainty, the possibility of Brexit and the size of the UK’s current account deficit are all additional but secondary reasons for short GBP/USD to be a favourite trade,” SocGen clarifies.

GBPUSD Daily and monthly chart November 2014 short trade in play technical pound dollar analysis

On the technical front, SocGen notes its GBP/USD is extending an ongoing downtrend after re-integrating a multiyear triangle.

Monthly RSI is breaking support and the pair is poised to show a deeper correction. A break below 1.5720 will indicate a further downtrend towards 1.5370/50,” SocGen projects.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.