{"id":2955,"date":"2010-10-16T19:04:26","date_gmt":"2010-10-16T23:04:26","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=2955"},"modified":"2010-10-16T19:04:26","modified_gmt":"2010-10-16T23:04:26","slug":"british-pound-breakout","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2010\/10\/16\/british-pound-breakout\/","title":{"rendered":"British Pound Punches An Underwhelming Breakout"},"content":{"rendered":"<p>Last month, as the British pound hovered around the converging support of the 50-day moving average (DMA) and the 200DMA, I noted that the currency &#8220;awaited a catalyst&#8221; before starting a new trend versus the U.S. dollar. At the time, I suggested that catalyst depended more on dollar-related forces. Sure enough, the dollar index followed through on its breakdown on September 21, and propelled the pound upward&#8230;kicking and screaming.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_2958\" aria-describedby=\"caption-attachment-2958\" style=\"width: 515px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/10\/101015_GBPUSD.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/10\/101015_GBPUSD.jpg\" alt=\"The pound tentatively breaks out versus the U.S. dollar\" title=\"The pound tentatively breaks out versus the U.S. dollar\" width=\"525\" height=\"331\" class=\"size-full wp-image-2958\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/10\/101015_GBPUSD.jpg 525w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/10\/101015_GBPUSD-300x189.jpg 300w\" sizes=\"auto, (max-width: 525px) 100vw, 525px\" \/><\/a><figcaption id=\"caption-attachment-2958\" class=\"wp-caption-text\">The pound tentatively breaks out versus the U.S. dollar<\/figcaption><\/figure><br \/>\nSource: <strong><a href=\"http:\/\/www.dailyfx.com\/charts\/netdaniachart\/?symbol=GBP\/USD\">Dailyfx.com charts<\/a><\/strong><br \/>\n<\/center><br \/>\n<\/p>\n<p>The underwhelming nature of the pound&#8217;s rise has come from its weakness against other major currencies. If it were not for the dollar, it would be much easier to see that <a href=\"http:\/\/drduru.com\/onetwentytwo\/2010\/09\/29\/posen-sleep-well-at-night\/\">the market is still expecting the Bank of England to extend quantitative easing<\/a>, thus weakening the pound. Here are is a summary of where the pound sits against some other major currencies:<\/p>\n<ol>\n<li><strong>Versus the Swiss franc<\/strong> (GBP\/CHF): Testing all time lows last set in fall of 2008.\n<li><strong>Versus the Australian dollar<\/strong> (GBP\/AUD): Set new all-time lows.\n<li><strong>Versus the euro<\/strong> (EUR\/GBP): At six month highs and up nearly 10% in almost 4 months (note this pair has the pound in the denominator).\n<li><strong>Versus the yen<\/strong> (GBP\/JPY): Before <a href=\"http:\/\/drduru.com\/onetwentytwo\/2010\/09\/15\/boj-saves-the-dollar\/\">the Bank of Japan&#8217;s intervention<\/a>, the pound was at 4-month lows versus the yen. The pound is 2% away from a retest. Exclude 2008&#8217;s plunge, and the pound would be at 15+ year lows versus the yen.\n<\/ol>\n<p>It appears the Bank of England is almost as effective as the Federal Reserve in driving competitive devaluation.<\/p>\n<p>Be careful out there!<\/p>\n<p>Full disclosure: short GBP\/CHF, long GBP\/JPY<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last month, as the British pound hovered around the converging support of the 50-day moving average (DMA) and the 200DMA, I noted that the currency &#8220;awaited a catalyst&#8221; before starting a new trend versus the U.S. dollar. At the time, I suggested that catalyst depended more on dollar-related forces. Sure enough, the dollar index followed &#8230; <a title=\"British Pound Punches An Underwhelming Breakout\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/10\/16\/british-pound-breakout\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[20,21,237],"tags":[128,276,127],"class_list":["post-2955","post","type-post","status-publish","format-standard","hentry","category-forex","category-u-s-dollar","category-united-kingdom","tag-british-pound","tag-currencyshares-british-pound-sterling-trust","tag-fxb"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>British Pound Punches An Underwhelming Breakout - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/10\/16\/british-pound-breakout\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"British Pound Punches An Underwhelming Breakout - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"Last month, as the British pound hovered around the converging support of the 50-day moving average (DMA) and the 200DMA, I noted that the currency &#8220;awaited a catalyst&#8221; before starting a new trend versus the U.S. dollar. 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