Hi, I have had a lot of emails this morning asking about the gbp/ & the Euro/$. If you are not currently in a Gbp trade I would strongly urge you not to touch anything Gbp related until next week (unless of course you are short on the Gbp:)
This mornings news was HUGE for the British economy. The -0.4% GDP figure confirms that their economy is in the deepest, longest slump since records began over 50 years ago. "Experts" were predicting 0.2% growth Any previous analysis is now irrelevant.
The way I deal with news announcements if I am in a trade is that 15/30 minutes before the release I decide whether to get out OR move my stops close(15/20 pips to current price- preferably behind an ema/fib/psych).
Because there was euro news due at 9.00am bst i had my stop moved to entry + 15 pips on my euro/gbp short. This was taken out with the news.
On my Gbp/$ long from yesterday. I had moved my stop to 1.6610 therefore locking in 95 pips profit. I chose 1.6610 because it was below a recent low and 5/8 on the hourly chart and 55 ema & bollinger band on the 15 minute. At this point price was another 50 pips higher. I was going to move my stop to 20 pips before the uk news, but the Gbp started to tumble after the euro news which really didn't make sense unless there was a "leak". The Gbp has already fallen 300 pips in the 1st few hours.
This news is so fundamentally so enormous that this could now signify a major move back down again !
As I said in last nights blog post, if price did not break 1.6740 area then the weekly head & shoulders pattern is still valid which means that this pair could now fall 1500 pips!!!
However do not pile in short now, it will be like trying to jump on a moving express train. The best advice is wait for the dust to settle over the week-end and then wait until the asian traders have had the chance to show their hands as well.
I will update you at the week-end. Best of luck, marc
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