A swing trade ideas for GBP/USD and the pound futures
|This is an actual quote from Gov Andrew Bailey's speech where he focused on Money Market Funds and their impacts on the financial markets and how the BOE reacted to liquidity issues:
The BOE took two actions which eased the pressure, and did so quickly. First, on 19th March the MPC decided to buy gilts in large size and at high speed. At its peak the pace of gilt purchases reached £13.5bn per week, more than twice as fast as in early 2009. The use of this broad monetary policy tool was warranted given the widespread nature of the dash for cash, and the implications of the pandemic for the economic outlook. Other central banks took similar decisions around the same time. This helped to stabilise markets and reversed the dash for cash and thus the flows out of money market funds. Second, the Bank activated its Contingent Term Repo Facility on 24th March, committing to lend unlimited amounts of reserves at close to Bank Rate against a broad range of collateral. Taken together, these operations brought money market rates back to more normal levels. The Federal Reserve in the US also launched a specific liquidity facility aimed at easing the stresses in dollar denominated MMFs. Turning the fire hoses on at full blast worked and cured the immediate problem. It is always worth remembering that all of this happened at a time of a global pandemic and a historically unprecedented collapse in economic activity. So, it is hardly surprising that large and rapid actions were necessary. It helped that the situation in respect of both monetary and financial stability called for such actions, so there was no conflict between the two.
For the British Pound which remains solidly perched against the USD, we have the following swing trade position which is currently active and we are trading the GBP futures alongside the forex pair. So here are the active trades and the associated charts which helped us enter this trade:
Trade idea
Chart
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