FxWirePro Call Review: Pound might correct another 400-500 pips against USD on Brexit optimism

FxWirePro’s long-term GBP/USD call continue to remain profitable and we would like to urge readers to maintain short positions over the medium to the longer horizon.

• In late January, in an article named, “FxWirePro: Sell pound targeting 1.376 against dollar”, available at https://www.econotimes.com/FxWirePro-Sell-pound-targeting-1376-against-dollar-1122287, we urged our readers to go short on the pound at the then current rate of 1.413 and at rallies around 1.42 against the USD targeting 1.376.
   
• In a subsequent review, https://www.econotimes.com/FxWirePro-Call-Review-GBP-USD-target-reached-at-1376-new-target-1354-1177319 , we extended that target to 1.354
   
• And, later, https://www.econotimes.com/FxWirePro-Call-Review-Maintain-short-positions-in-GBP-USD-target-revised-lower-1315235 we have confirmed the 1.3 area as our next target and, only to revise it lower to 1.25 area in the next review here, https://www.econotimes.com/FxWirePro-Call-Review-GBP-USD-target-revised-lower-to-125-area-1336050
   
• And in our latest review, we have extended the target to 1.17 for the pair, https://www.econotimes.com/FxWirePro-Call-Review-Pound-nears-target-short-side-target-further-extended-to-117-against-USD-1415812

However, in the short-term, the pound could strengthen against the USD.

In our last review, we shared the idea that the pound is moving into a consolidation phase against the USD, https://www.econotimes.com/FxWirePro-Call-Review-GBP-USD-to-consolidate-maintain-short-positions-1418527

Based on the latest calculations, we expect the pound to correct further against the USD to the tune of 400-500 pips. The pound is currently trading at 1.301 against the USD but that doesn’t change our medium to longer term bearish outlook.

Anyone planning to trade this bullish opportunity in the short term, we recommend entry at the current price of 1.301 and at dips with an initial target of 1.325 area, 1.337 area as the second target, 1.345 area as the third target, and 1.355 as the final target. Partial profit bookings recommended at those levels. The stop loss should be below 1.27 area.

This short-term momentum would continue to gain strength from positive talks on Brexit with Michael Barnier forecasting an agreement by November, Broad-based weakness in the dollar, Positive employment numbers (4 percent unemployment with wage growth at 2.9 percent).