Market History for Oct. 22: British pound

The U.S. Dollar is at it again pounding the British Pound (GBP/USD). The pound lost 2.7% against the Dollar in Tuesday's trading setting a new 52-week low. Over the last five trading days, the pound has lost 3.9% vs. the dollar. The pound is now trading as low as $1.6651 which is near a five-year low for the exchange rate, also known as "cable".

Q: How has the GBP/USD responded to a 'very big' loss that crosses below its 52-week low?

A: According to the 22 previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge indicates that GBP/USD has shown a somewhat bearish edge that peaks five trading days after the event. Thus, the projected date for the peak of the bearish edge relative to the current event date (Tuesday, Oct. 21, 2008) is Tuesday, Oct. 28, 2008.

GBP/USD declines in 82% of the cases (18 of 22) by an average of 1.8% relative to the close on the event date. The average of the four rallies is 0.9%. The overall return of the 22 cases is -1.3%, which, based on the close of GBP/USD on the event date ($1.6700), provides a target price of $1.6500.

To see this in EventEdge® click here.

Mickey Schoenhals is an analyst with Markethistory.com.

Related Ideas:

British Pound in U.S. Dollars - Nose Dive - August 11, 2008

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome