The Brexit low and 1.3200 is now toast, so what is the best way to trade cable?
There's an easy way to trade cable right now. Go wide on your charts and pick the bigger areas where the price is likely to ask a question.
Friday I said 1.3500 - 1.4000 was the range to play and to go with a hold or break.
The break took care of itself and here we are in tumble city once again.
GBPUSD 15m chart
Given that we've not been down at these levels for many years, I'm keeping the long-term charts open, and the closest place I see now where any further drops might run into trouble is from 1.3050/60 down to 1.29.
GBPUSD monthly chart
This is the only spot we've had action around these levels since 1984/85. The horizontal line is not entirely indicative of a single level to trade, it's there to highlight that we've got several bars that were either support or resistance around 1.30. It's another long-term level like 1.3500 was.
If you want to be brave and try and catch this knife then you will need to watch these levels. 1.30 will be big on it's own, so we'll get support there. Ultimately, I'd draw a final line at 1.2850. That would be the point where a break would likely mean the next big drop to somewhere around 1.2400.
The range for me is 1.3500 to 1.30, while possibly allowing some room down to 1.2900/1.2850. To me that's a simple as it gets. Two levels, two rules, hold or break.
