One of the most important principles of FX trading is pairing a weak currency with a strong currency. The reason for doing this is to increase the probability of the future direction of the currency pair. In the case of the pound, we have seen steady gains all year due to expectations that the Bank of England will have to increase interest rates to deal with staggering inflation in the United Kingdom. This has resulted in a very stretched-long GBP position, but that now looks close to exhaustion. The expectations for the Bank of England are that it may have one or two more interest rate hikes to go, but now investors ... (full story)