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British Pound Futures

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Free in-depth analysis of the British Pound futures market written by a professional British Pound trader.

April 17, 2013

Bristish Pound Futures Broker, Van Commodities, Inc.

The British Pound future (B6M13) has traded down a bit over one percent over the past four days, after becoming overbought. The contract appears to be rolling over to the downside and B6M13 traders will have to contend with UK Retail Sales data tomorrow.

 

The Pound’s move to the upside over the past five weeks appears to have been a contra trend rally. B6M13 became deeply oversold as a result of the ten week swoon, which took the contract from a high of 1.6300 to 1.4823, on an intraday basis.

 

B6M13 seems to be vulnerable to renewed selling over the intermediate term. Short term momentum indicators have rolled over and would reinforce further selling. Initial resistance may come in at 1.5260-1.5300 and stronger resistance at 1.5340-1.5360. On a short term basis initial support basis may come in at 1.5060-1.5120 and further support at 1.4970. Over the intermediate term a retest of the 1.4823 low of five weeks ago would not be a surprise.

March 03, 2013

British Pound Futures Trader, Van Commodities, Inc.

The British Pound, basis the March future (B6H13) has depreciated roughly eight percent since it hit an intraday high of 1.6375 on January 02. Britain’s economic and fiscal backdrop has deteriorated over the past several months, culminating with Moody’s downgrade to the country’s credit rating from AAA to AA on February 22. The previously considered safe haven position for the British Pound, throughout the financial turmoil in the Euro Zone, appears to have ended due to the imbalances in the United Kingdom’s (UK) economy.  

Investors’ view that the Bank of England (BOE) is comfortable with a depreciating British Pound to increase exports, reduce the downside pressure from tight fiscal policy, and rebalance the economy, is leading market participants to discount the possibility of further monetary easing by the BOE. Currency traders and investors will be looking towards George Osborne’s, Chancellor f the Exchequer, budget address on March 20th 

BPH13 is oversold based on several short, intermediate, and long term momentum studies. Although BPH13 will possibly seek lower levels over a long term time frame, a tradable bounce for BPH13 may occur in the near term. BPH13 may find support for a tradable bounce at 1.4760-1.4965. On a bounce initial resistance may appear at 1.5250-1.5350 with longer term resistance at 1.5450- 1.5510.

February 03, 2013

British Pound Broker, Van Commodities, Inc.

The British pound will have to deal with several economic indicators released throughout next week as well as a Bank of England (BOE) meeting. The market consensus is for no change in policy regarding interest rates or the BOE’s asset purchase program. The forth coming economic data to be released includes; the Purchasing Managers Construction Index (PMI), Retail Sales Monitor, Markit Services PMI, UK Trade Balance, and Industrial/ Manufacturing Production.

 

The British Pound Future (B6H13) closed down on Friday after trading higher earlier in the week. The price appreciation, off of last Monday’s multi week closing low, appears to have been a short covering rally.  Based on several short term momentum indicators, B6H13 had become oversold after a roughly four percent decline during the prior four week period.

 

B6H13 price action on Friday was negative as the currency future initially scored a high for the week in overnight trade, before reversing powerfully to the downside. The reversal day down increases the odds that B6H13 will trade towards 1.5480-1.5550 before finding any support. Stronger support may come in at 1.5260-1.5360.  Initial resistance for B6H13 may come in at 1.5750-1.5830 and further resistance at 1.5880-1.5920.

December 03, 2012

British Pound Futures Trader, Van Commodities, Inc.

Traders in the front month British Pound futures contract (B6Z12) will be buffeted by several factors over the week including; economic statistics, a Bank of England Policy Meeting and the Treasury’s Autumn Forecast Statement. Today Markit/CIPS Manufacturing Index (PMI) was released and came in better than the market consensus. The PMI improved from Octobers low, but the overall level of the index is still indicative of a vulnerable economic environment. Throughout the rest of the week several other data points will be released; including statistics on retail sales, Construction, the Service sector, International trade, Industrial Production and a GDP Estimate by the National Institute of Economic and Social Research.

 

B6Z12 is overbought based on several short term momentum indicators, but intermediate momentum indicators still show the potential for more upside price action. B6Z12 has been trading in a $.10 range since January 2012, 1.5240-1.6281. The close December 03, 2012 indicates the potential for further upside price action over the intermediate term. Over the near term B6Z12 may run into resistance 1.6123-1.6186 and then 1.6260. Support for B6Z12 should appear 1.5975-1.6005 and then 1.5902-1.5940.

Van Commodities, Inc., British Pound Trader - April 23, 2102

From the lows on April 16, 2012 at 1.5813 to the intraday high April 20, 2012 of 1.6146, the British pound futures contract (BPM12) traded up around 2 percent verse the US dollar. The economic data reported during the week for the UK economy came out stronger than expected. The statistics released included unemployment numbers, retail sales and inflation all of which showed an economy that is probably growing faster than previously thought. The Bank of England's (BOE) minutes, released April 18, 2012 showed a more hawkish stance in respect to future monetary policy and a reduced chance of any increase in Quantitative Easing in the near future. Market participants will be watching for several data releases over the coming week including; housing prices, Public Sector Net Borrowing, GDP and the CBI Industrial Trends Survey to see if the data confirms a better economic environment than previously thought.

BPM12 is trading at the top end of an ascending triangle and several momentum studies are registering an overbought condition. The June 2012 British pound futures contract is trading at its highest level against the US dollar (USD) since September 2011 when it was on its way down from a high above 1.6500 to a low of 1.5240. BPM12 appears due for a pullback and possibly in the form of profit taking ahead of the heavy data barrage during the week, but most importantly, the statistics released on April 25, 2012. Profit taking could start from any of the levels already attained, but significant overhead resistance should come in around 1.6250. On a pullback, minor support should come in around 1.6050 with better support around 1.5920.

February 7, 2012

Commodities Broker, Van Commodities, Inc.

Over the past several days some of the economic news out of the United Kingdom has relegated the thoughts of a UK recession to the backburner for some traders. The UK's Purchasing Managers Index (PMI) for the manufacturing sector reported February 01, 2012 came in at 52.1 up from a revised 49.7 in December, with overall activity at its highest level for eight months and the PMI for Service Purchasing Managers recorded a reading of 56, stronger than expected according to Markit/CIPS. With the service sector accounting for 70 percent of UK GDP many are rethinking their overall view on the UK economy and therefore the British Pound. 

The currency market will be looking to the Bank of England’s meeting February 09, 2012 to see if there is any mention of any further quantitative easing, as many had expected to be forthcoming for this meeting, after last months poor economic data. 

On February 07, 2012, the March pound futures hit its highest price level verses the US Dollar today, since November 14th when it was on its way down to a low of 1.5222. The British pound sterling has not only benefited from the general risk on trade coming back into favor, but has been fuelled from the technically very oversold levels attained on the prior months concerns over Europe and poor UK economic numbers, reported in January.  The pound now appears to be overbought, based on momentum studies, and has rallied on declining open interest since hitting the previously mentioned low. The 50% retracement level for this move comes in at 1.5922 and the 200-day average comes in at 1.5930. After these two levels the next major resistance comes in between 1.6050 and 1.6100.