(This is an excerpt from an article I originally published on Seeking Alpha on October 23, 2012. Click here to read the entire piece.)
It took a while, but the British pound (FXB) finally broke down against the U.S. dollar with a recent break below the 50-day moving average (DMA).
Source: FreeStockCharts.com
This breakdown is occurring ahead of the Federal Reserve’s next statement on monetary policy tomorrow (October 24th) and announcements on GDP for the third quarter for the U.S. and the U.K. Expectations are that the U.K. will finally register quarterly GDP growth at 0.6% although this is still a -0.5% year-over-year decline. The U.S. is expected to log a 1.8% annual growth rate. The current trends seem to confirm that the growth differentials between the U.K. and the U.S. will persist and will once again weigh on the currency pair.
{snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on October 23, 2012. Click here to read the entire piece.)
Full disclosure: short USD/GBP