(This is an excerpt from an article I originally published on Seeking Alpha on August 27, 2012. Click here to read the entire piece.)
After three months bouncing up and down in a wide range, the British pound (FXB) is finally breaking out against the U.S. dollar (UUP). This follows a very uneventful Summer Olympics where the British pound languished for the first few days and then ended the period nearly flat with the beginning of the period.
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The languishing trade during the Olympics makes sense in light of expectations that the games had very little impact on the British economy. {snip}
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The action of the British pound versus the Australian dollar (FXA) has become interesting as well. After sliding for almost two months non-stop, the pound has spiked higher against the Australian dollar. The 50DMA provided no resistance and a move above the 200DMA all but assures that the current bounce will sustain itself for quite a bit more time. If previous spikes are any guide, the GBP/AUD pair should rally at least to 1.60 before stalling.
Source: FreeStockCharts.com
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on August 27, 2012. Click here to read the entire piece.)
Full disclosure: long British pound