GBP/USD: Sell the rallies
The obvious play for the GBP/USD is to sell the rallies. The USD has been strengthening, the Fed has been growing in confidence with a string of rate hikes expected this year. Conversely, GBP has been weakening. A slew of bad data and BOE's Governor Mark Carney backtracking on the idea of a May hike has led to a constant GBP sell off. GBP/USD short is a no brainer.
However, price is sat in a key area of supply and joining a sell here does not look like the best place. So, where to get in? Well the first port of call for me is to look at a pullback on the 4 hour chart and a beat on the services PMI may present the opportunity I want. Failing that Construction and Services PMI on Wednesday and Thursday can present further options too
On the chart below I have marked todays option level at 1.3915, which may provide a key turning point if price rallies. My plan from there is to enter short on weakness, stop above top of fib and go for another leg down. Today may be the day to get a pullback for a swing trade.
