British Pound Breaks Out After Uneventful Summer Olympics In London

(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.


British pound breaks out after uneventful Olympics trading
British pound breaks out after uneventful Olympics trading

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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.


The GBP/AUD pair tends to move in long, sustained waves of trading
The GBP/AUD pair tends to move in long, sustained waves of trading

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

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