The Market Word - British Pound

The Market Word - British Pound

The British Pound is the official currency of the United Kingdom including the British territories!  In some ways, analysts say, Britain has more risk in the crisis than the other members that do not share the euro. Britain is central to Europe’s largest financial community and a vital part of the economy. The British economy is interlinked with the Euro zone. The Euro Zone primary nations such as France, Germany and Italy, are by far Britain’s largest trading partners. The British Pound is therefore subject to the Euro debt crisis effects more closely than many nations. Last week's Euro summit had less than stellar resolve. The European Central Bank (ECB) had withdrawn any statements about potentially loaning the International Monetary Fund (IMF) any money or increasing the bond purchases. The Euro summit only agreed to facilitate stricter budget targets with penalty to countries that may not adhere to the austerity measures. It is thought that at least part of the Euro Zone is already in a recession. Typically, in years past, the US had been a powerhouse in terms of bailing out countries with problems. The downgrade that the US succumbed to in August losing its AAA credit rating had put the focus on budget cuts, tax hikes and recovery. This has globally affected the Euro crisis for the lack of participation. Timothy Geithner, United States Secretary of the Treasury, has further confirmed that the US will not take part in the Euro bond purchases. China had originally thought to begin a $300 billion fund to manage the US and Euro debt instruments. Yesterday, they had decided to change their strategy to become more involved with "real assets" perhaps real estate, agricultural land, equities and corporate bonds. The lack of support by the ECB, the US and China may deeply effect the Euro Zones ability to stabilize the Euro. This coupled with a potential downgrade of 15 of the 17 countries along with the European Financial Stability Facility (EFSF) really may be almost impossible for the Euro leaders to contend with. There is also the scenario if the UK were to leave the European Union (EU) and perhaps join the European Economic Area (EEA) with Norway, Lichtenstein, Iceland and Switzerland. There would be additional challenges in that scenario as well. There seems no retreat from the downward cycle to date!

Technically, the British Pound is in sell mode on the Hourly and Daily Chart according to the Wilder's Parabolic SAR!

Sample Trade Opportunity! Sell March British Pound (6BH12) at $1.5475. If filled, buy 6BH12 at $1.5575 Stop or buy 6BH12 at $1.5075 Limit (Target). The risk on this trade is $625.00 plus fees and commissions. The profit potential is $2,500.00 less fees and commissions. The expiration is March 19th, 2012.