Times must indeed be dire in UK. In an effort to raise money to pay down the public debt and close the budget deficit, government of Great Britain announced today it will hold a sale of public assets. Perhaps the most public among the items listed to be auctioned off is the Channel Tunnel rail link. Others include the Dartford bridge and tunnel crossing the River Thames and betting company the Tote, as well as the gove 33 percent stake in European uranium consortium Urenco. British government expects to raise about 16 billion pounds over next 2 years. At the same time, local authorities will sell off another 13 billion pounds in assets such as business parks and leisure centers.
While this action will not solve all fiscal problems, it gives an impression that the government is doing everything it can. At least that’s the intention. To others, though, it smells of desperation. Financial markets responded in equally mixed fashion. London equities staged impressive rally, pushing FTSE 100 Index to new yearly high, British Pound fell once again in relation to other currencies. GBP opened strong after the weekend, but then it dropped like a rock after Europe opened for business. This put a major kink into my GBP-NZD trade. It was trashed.
Cross ran up quickly by about 200 pips, triggering my buy order, only to collapse just as swiftly shortly after. Once price reached 100 SMA and couldn’t find support there, I decided to close it for 147 pips loss. Next logical support was another +100 pips lower, with no guarantee it would hold. If the price move stops at around 2.1450 or so, I will be looking for more buys here on increase above any previous highs. Perhaps as early as today.
Hourly chart of EUR-AUD spent another day in a price range. This has makings of bottom building process. No way of telling before hand if it is for real, or simply consolidation, similar to GBP-NZD. Well, technically, that one is still consolidating, only I decided to exit it. That’s why I keep watching it for another buy. Here, in Euro-Aussie, I’m also interested in going long. Buy order is placed at 1.6368, looking for a little over 100 pips. I hope this sideways action continues for another day or so. That will make following breakout more significant, no matter what direction. With any luck, it will be to the upside.
Mike K.
Hi Mike,
It is a very nice site you have here. Very neat and appealing… also, filled with useful information as well. I also have a PR3 blog and would be interested for a linkback. If you are also interested, please come to my blog to contact me or contact me through the email directly. Thank you
My blog is at forexkid.blogspot.com
[...] Garage sale in UK. [...]
Mike, what do you think about shorting the beast under 141.50 using 15M charts or hourly?
Heather, yes with carefull stop. One of my proprietary indicators is starting to turn up on hourly. But I must admit 15M looks great for a sale on a break down! It must move first, though.
Thanks!
Be carefull around European open. Very often trends change at that time. I’m not saying it will change, just to be tight with stops.
Thank you for the link Mike. Link up as well… Keep u with the good work
[...] I’m referring to the British Pound mostly. Yesterday GBP got hammered on the news that the government is going to sell some of the assets it holds. What a difference one day makes. Today Pound recovered smartly and broadly. The statistics [...]
[...] Yen was weak on all fronts, loosing hundreds of pips in all pairs. About time. When I wrote about Garage sale in UK, possible trade in EUR-AUD was suggested. I closed it yesterday at a [...]