GU is at a very strong support zone. Even though it broke below the psychologial 1.25000, there is much fib support here.
Of course, if PM May loses power, GU will take a strong dip. BUT, that may actually be GOOD for the Pound going forward, if the market imagines a more capable PM.
I expect some bounce right now, maybe just a dead cat. If this support breaks, I think it can only a little lower before recovering.
Background: I am a Dollar Bull and Pound Bear, and will remain so until BOE starts talking about rate hikes or PM May starts presenting a positive and plausible Brexit scenario.
My GU adventure started with a search for top of uptrend around Sept 20th
Then came the big drop, which I caught most of. I started looking for bounces to short
Next I was looking for 1.2700 as a bottom which was hit and bounced hard
After taking some longs on the bounce, I was looking for shorts again:
Rode it down to 1.283xx and then good Brexit news made it bull, which I caught one leg of
Since then it has been all downhill for course. Now I am looking for a bounce at strong suport to short again
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Some news brought a bounce notice the relevance of the FIB zone, not the round figure of 1.2500 that formed the support.
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Bounce turned out quite strong PM May won the no-confidence vote, but imo it was a not a good showing. Her margin of victory was not impressive, with almost 40% of her OWN party voting her down. I have closed longs for now, will observe over the next day or so.