Heading into the start of 2019, the news headlines and financial publications would have had you thinking the UK economy was going into a tailspin with many calling for parity on GBP/USD as concerns over a disorderly Brexit continued to take root. While no deal has yet been reached heading into the final days of December trade, Sterling is poised to close markedly higher on year after rebounding sharply off the 2016 post-Brexit lows in early September. So, what gives?
They might make for snazzy titles and garner a lot of pageviews, but when it comes to trading, the headlines are the last place you should base your trade ideas. At the end of the day, you are trading price action – not headlines, central bank policy, or inflation expectations – but rather the reaction to these releases. Let the technicals be your guide, and the headlines be your trigger – Always remember, markets do not reward the masses and when it comes to viable trade opportunities, the perceived ‘conventional wisdom’ is oftentimes anything but.
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
