Pound drops below 1.5 against Dollar, first time in seven months

There seems to be no end to Dollar buying against peers heading into FOMC in December, where FED is widely accepted to hike rates.

Since June, Pound has been trading in a downward sloping channel against Dollar, and now Pound is on its way to test the channel floor at 1.493. Pound is currently trading at 1.5015. Pound has been one of the top performer against Dollar, however that performance waned since bank of England's (BOE) inflation report suggested that inflation might remain relatively even if BOE doesn't hike in 2016.

Traders have aggressively scaled back long trades in Pound since then. Today BOE extended its funding for lending scheme, which allows commercial banks to borrow at cheaper rate and use the fund for lending purpose. The scheme has been extended till January 2018.

Trade idea -

We maintain both of our short call.

• Sell Pound @1.517 targeting 1.496 area.
• Sell pound against Dollar @1.54,1.52 with stop loss at 1.58 and target at 1.42 area.