Trade Idea GBP showing weakness, are we looking at a breakdown?

[Robert Vance]

Anyone else watching cable get hammered this morning? It looks like the risk-off sentiment is finally catching up to the pound, and I’m starting to get a bit jittery about my current long position. We’ve been hanging around this consolidation zone for a few days, but the way it’s slipping right now suggests the bids are being pulled pretty aggressively. I’m looking at the charts and it feels like we’re testing the local support levels that held up fine last week, but the order flow is starting to look awfully heavy on the ask side.

I’m trying to figure out if this is just a quick liquidity grab before a bounce or if the momentum has truly shifted bearish for the short term. Ngl, the price action is looking pretty sloppy and I’m half-tempted to scalp a short just to hedge, but I don’t want to get caught on the wrong side if the bulls decide to defend this area. Has anyone spotted any major clusters of stop losses sitting just below these lows, or are we mostly looking at a wider macro sell-off dragging everything down regardless of the technicals?

 

[LucasBennet]

It's definitely looking soft on the charts, but I’m hesitant to call a full breakdown just yet. Honestly, I’m flat until the next US CPI print comes out. If the inflation data stays sticky and the dollar catches a bid, Cable is going right through the floor, but I’m not jumping the gun before the news hits. Too much event risk this week to be guessing.

 

[JulianCraft]

@LucasBennet Spot on about waiting for CPI, man. Honestly, anyone trying to buy the dip on Cable right now is just begging to get rekt. Sticky inflation isn't going anywhere and the Fed is definitely not done hiking, no matter what the market keeps high-fiving itself over.

Once that US data prints hot, the dollar wrecking ball is just going to obliterate everything in its path. I'm completely in cash and bracing for impact.