Price is the only truth in the market, anything else is a lie, a damn lie or statistic.

So the EUR/GBP played me this week, as GBP strength did surprise me and I underestimated it. Thanks to increased risk appetite (for some RIdiculous reason in light of more debt defaults), GBP rallied even past 0.9054 to a low of 0.9024 - a completion of the quarter to 0.9000. And again, the pair still finds support on another attempt towards the 0.9000 level. That is a bullish development.

Secondly, price still respects the Fibonacci retracement levels on the daily charts. This makes the current levels a nice buying opportunity. Yesterday’s session, my bullishness was waning but rightfully so as intraday, the pair dropped 80 pips. I had too much risk on the table to hold my longs during that anticipated drop. Another lesson in trade management, timing, and psychology for me this trading week. I’m a better trader for it.

Lastly, I was discussing with Paul Pinfield on Twitter that the GBP can’t defy fundamentals forever. Perhaps, forever has arrived: 1) The Financial Times confirms that UK banks (5 in total) bear the biggest brunt of Dubai World’s debt, to the reported tune of $2 billion. If this plays out as true, UK equities will undoubtedly suffer and drive the GBP lower with a double whammy of increased risk aversion. 2) The ECB is up in a few hours with ECB President Trichet speaking later in the morning. They are expected to be quite hawkish and this contrast in policies with the BoE will keep this pair supported still.

So my start of the week analysis still holds with an additional target at 0.9150 - targeting ST resistance at that level. This is a good first target to unload and book pips. As I always say: Trade what you see, not what I think.