My last three trades have all been stopped out, and I’m obviously not in good sync with the market. I may just have to go back to basics entirely and rely 100% on my favored Systems Trading, refraining from discretionary trades until I get a better feel for the market.

Looking back over the headlines of the last 36 hours, there has been virtually no news or economic release to discourage confidence on the British pound. In contrast, the data behind the euro has deteriorated dramatically and the situation with Greece seems to be passing the point of no return. Naturally, this would suggest that the euro would be tumbling while the pound is relatively stationary; but this is certainly not the case. In fact, the regional currency is relatively anchored on the day, while the sterling has plunged. This is an unusual set of circumstances that perhaps falls back on dated beliefs that the UK perhaps as bad as it was six months ago; and the Euro Zone is more stable. I think this is a false notion and the market fundamentals will work themselves soon. Of course, it doesn’t pay to bet against the market until there is a sign that market itself is ready to change its mind.

From my positions this morning, I have booked a loss and profit. After EURGBP broke above the 200-day SMA at 0.8835 and held there on an intrday basis, I decided to cut out for a 50 point loss. However, this was more than offset by the 200 points that I was able to make after taking off half my GBPUSD position this morning. I still like GBPUSD short and will keep the remaining half of that position on with a trailing stop. Looking across the market for other pound-based pair setups; many of the crosses are either set in the momentum of breakouts or are in the middle of ranges. I am somewhat interested in GBPCHF coming to the floor of a wedge formation (with the rising trendline that defines support dating back to January 2009) around 1.6425. However, it is best to wait and see what price action looks like when we get to that level rather than just setting a blind entry order.

I initially sold GBPUSD at 1.5765. Prices are now pushing through near-term support at the bottom of a falling channel established from the swing high in mid-November having re-tested major support-turned-resistance at the 1.58 figure and I will remain short, continuing to target 1.5291. A stop-loss will be activated on a daily close above 1.6000.

I added fresh short GBP/USD positions at 1.5500 and today’s break below support at 1.5344-50.0% Fibo justifies the position and may warrant additional positions. I am a little reluctant with the BoE rate decision looming. The central bank has continued to hint at the possibility of adding to their asset purchase program which could come next week. Sterling should continue to trade lower as markets continue to price in the quantitative easing. However, non-action from policy makers sets the pair up for a sharp reversal which may lead me to take profits beforehand.

The GBP/JPY weakened for the sixth-day, with the exchange rate slipping to a fresh yearly low of 135.85, and it certainly seems that I have gotten ahead of myself as the daily RSI slips into oversold territory. The sharp overnight decline tapped out the long trade from 139.35 with a 90pip loss, but I expect to see a corrective retracement over the next few days as the sell-off stalls ahead of the 135.80-90 level, which coincides with the 61.8% Fib retracement of the 2009 low to the high. As a result, I will wait for further confirmation before looking to fade the recent decline, but will stay flat on the pair for the remainder of the week as market liquidity thins ahead of the weekend.