GBP/USD preparing for a move as it marks tripple bottom
The GBP/USD pair is setting up for a move this afternoon as London trading draws to a close. We are looking at the order flow today and expecting a big fight between buyers and sellers before a directional move is triggered.
On the fundamentals side, we are increasingly focusing on the prospects of the United Kingdom to leave the European Union. That said, there is not a big likelihood of that happening at present.
Despite what pundits are saying, the U.K. is nowhere close to exiting the E.U. at present. The "leave" campaign got the support from London Mayor Boris Johnson, which triggered a selloff in the GBP/USD at the start of the week.
The prime minister of the U.K. David Cameron is supporting the "stay" camp and voters appear to be backing him according to the latest set of polls on the matter.
Today's GDP data from the U.K. came out as expected and triggered a rally towards 1.3980, however a very string durable goods report from the U.S. has reversed the direction of the pair and we have seen a third test of the base around 1.3900.
How to trade
Looking at the chart we would be buying daily puts if we see a break below 1.3900. What's more likely at present however is a move to the upside - we will be buying daily calls if the price gets to 1.3955.