GBP/USD and SPX are closely related. The chart comparison of SPX versus GBP/USD show a fairly negative correlation.
This is odd, and unusual to history, because it implies that USD is positively correlated with the SPX. Its a strange situation where rate hikes are interpreted as 'good' for the market.
With this in mind, a sell-off in SPX would undermine the economic recovery, and also expected US rate increases, which is turn would be good for GBP.
Absent of a sell-off the UPSIDE risk to GBP, is a UK interest rate increase. I think this is entirely possible with rapidly increasing inflation here in the UK, and faster than in U.S. (you must check this yourself).
Conclusion: pause and wait for GBP/USD to close above Resistance. If so, initiate a long position.
This is odd, and unusual to history, because it implies that USD is positively correlated with the SPX. Its a strange situation where rate hikes are interpreted as 'good' for the market.
With this in mind, a sell-off in SPX would undermine the economic recovery, and also expected US rate increases, which is turn would be good for GBP.
Absent of a sell-off the UPSIDE risk to GBP, is a UK interest rate increase. I think this is entirely possible with rapidly increasing inflation here in the UK, and faster than in U.S. (you must check this yourself).
Conclusion: pause and wait for GBP/USD to close above Resistance. If so, initiate a long position.
