While cable is crashing, banks batten on its misfortunes
Pound depreciated 4.2% last week, which it its worst performance since June 24. The slide accelerated after prime-minister Theresa May said, that she is going to trigger Article 50 in March next year. With GBP crashing to its 31-year low, many GBP short positions of the main stakeholders (CitiFX, Societe Generale and Credit Suisse) hit their long-term targets and got into big money. While many traders abstain from selling after tremendous GBP slump, suspecting consolidation in near-term scenario at 1.23-1.26 levels, the National Australia Bank (NAB) started its trading week with a new short GBP/USD position.
NAB decided not to keep to a conservative trading approach of waiting for the currency stabilization and initiated the trade at 1.2414 targeting 1.16 with a wide stop at 1.2750. This decision was taken due to the fact that the pound revealed its weakness during the 7th October session slumping precipitately in a matter of time. The trending cable is perhaps the easiest directional victim for investors, according to NAB.
NAB is short GBP/USD from 1.2414 with a target at 1.16 and a stop at 1.2750 since the 9th October trading session.