The British Pound (Cable) certainly has been in the headlines (and not all press is good press) a lot since the Brexit vote. Above is a picture of the short-term price behavior for the British Pound. Each vertical line represents a weeks worth of trading. A red line signifies a weekly closing price below the previous weeks close and a black line signifies a weekly closing price above the prior weeks close.
In addition to the up is good and down is bad general observation one can deduce from price charts, where the price closes within its weekly trading range can also be useful information. For example, if the price closes in the upper range, one can view that as bullish price action and a close in the lower end of its price range as bearish price action. To the right side of the graph, I've taken the liberty to mark with blue arrows what I'm talking about. Over the past 18 weeks, the British Pound has closed in the upper part of its weekly trading range 13 times. This works out to be slightly above 70% of the time. This isn't overly bullish, but it is far from bearish. The most recent 18 weeks price behavior can be characterized as very different than the price behavior for all of 2016. This is worth noting.
While Europe is pretty much a disaster, staring down the barrel of an unimaginable sovereign debt problem, the UK may turn out to be a shining light! Remember, price will move in anticipation of fundamental changes. So if you are waiting to see robins to tell you its Spring, you're late. Timing is everything.
Cheerio!
P. Franklin, Jr.
July 14th, 2017
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