Cable Update (GBPUSD)
im 11% up already but it has good chance of going higher
...but it is something to keep an eye on...lets wait and see !!!
I was thinking about the latest events...and then I remembered something that an analyst predicted a while ago. He said that with a rate cut, we would see a paradox of a rate cut being bullish for the dollar.
Well, now just picture this.....
Rate cut spreads a frenzy all over the economy. Combined with an euphoric stock market, it "Masks" the effects of the sub-prime etc.
UK finds itself in more trouble because their own sub-prime problems are just starting to "bloom", which will in consequence make them copycat America and start cutting rates.
In this kind of scenario, I think it's quite possible that the cable .... again...I'm talking about the cable here, will go down pretty low.
hehheheheheh...of course I may be thinking this way because I'm short
.What bothers me about cable in the long run is the hike cycle coming to an end. Although dollar is likely to resume its downtrend, GBP's upside could be capped.
That's why EURGBP spiked the way it did. Euro has room for other hikes (as clearly stated by Trichet) and as I prefer trading inline with the prevailing trend, euro is the one I'm looking for to go bigger.
As I mentioned before, euro is a fair partner. Easier to "read". Therefore, you can go bigger in this pair as to balance its lower volatility compared to cable
In "pips" I made more on cable today. But in "$" I made more on euro with a light drawdown.
, I would close my positions for a BE or loss. But....I still think the cable,and strictly the cable, will go down. The two countries that took the most profits in the sub-prime scam were USA and UK. America is just too big to break like that...but England.....hummmmm....not so sure they can handle it.If I was long on ANY other pair....even DOLLAR/REAL....
Just a short while ago, on Bloomberg, a top economist stated that he had gotten rid of his sterling. He stated that it was still a very vulnerable currency, and that with the housing problems in the UK the BOE may be cutting the rate soon. He advised people to be careful with the sterling.
Hey...
What about those ultra-multi-quatrillion dollars bin-laden-options expecting selloff on Sept 21st?
I think bin-laden's mobile is ringing like crazy today...
what i dont get is that after 9/11 attacks the interest rate differential between pound and dollar and euro and dollar was much greater than it is now and yet pound end euro reached their records this year with much narrower difference in the rates.
happening, and honestly I can be dead wrong...but I don't see the dollar or America being overpowered anytime soon, just because USA still has the ultimate fundamentals on their side, the dough and the big guns 
