This week remained bearish on our cable trade with making new lows down to 1.56 level. We saw our best mover on May 22nd with 103 pips of movement and a total of 388 pips for the week. Our 5 day daily average on Gbp/Usd coming in at 78pips. Our most volatile day was Friday, Non-Farm Payroll seeing our jobs report come in at a very disappointing 69,000 jobs, expecting was around 151,000 with our previous numbers for last month at 77,000 jobs. The market swung violently to this info and taking out the majority of shorts in the market and surprising traders with our market makers (ECB, BIS, China Central Bank, among others) likely buying into this market and moving the market with a firm move to the upside instead of the expected continuation down.
The overall outlook for the Gbp/Usd still looks very bearish and I believe we likely head down if we stay below the 200 SMA. Even with some bounce to the upside there will more likely be continued strength to sell with a good possibility to see our 2010 lows at the 1.42 level.
ps. On a side note the USD/JPY market looks very ripe for some good intervention from the Bank of Japan as Monday and Tuesday are UK bank holidays and there would be more bang for your buck with a thin market to do some serious intervention and it go a long way. So we'll see what happens...
Have a great trading week!
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