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GBP/USD Bucks Trend - Bloody Day

By Benny Nardino | April 8, 2008

The British pound sterlings saw reversal from last week’s budding trend this morning. Forex traders began Cable, GBP/USD sell-off in the Asian and Pacific market sessions of the early hours of today. The shorts remained intact through Euro and US trading Sessions all afternoon.

However, this trend aversion was not surprising when one looks at the bigger picture. The UK Housing numbers also came in weaker than expected which further aided the downward slide. It has since dropped over 260 pips in the process.

As I have re-iterated in the past, the GBP is in a consolidation mode looking at the long-term prospect. In the near-term, we will be seeing many of these vacillations. The monthly-chart reveals an Elliot Wave consolidation, (4th Wave). This cycle could take weeks or months to fully mature.

Nonetheless, the overall momentum clearly marks a downward movement for the pound sterlings for now. But continuation in this direction would hinge on many other factors governing the UK domestic market and geopolitical challenges at the moment.

My advice is to trade with caution.

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