September British Pound Futures: How to Trade Stagflation Threats and the Moody's Debt Downgrade
September British pound futures (B6U25) present a buying opportunity on more price strength.
See on the daily bar chart for the September British pound futures that prices are trending higher and have just hit a three-week high. The bulls have the solid near-term technical advantage to suggest still more price upside in the near term.
Fundamentally, the United Kingdom's economy is healthy, overall, and the U.K. and the U.S. are on better trading terms than is the case with the U.S. with most other countries. Meantime, the U.S. economy has also shown some strength but the recent downgrade of U.S. debt by Moody's reminds currency traders of the high U.S. debt burden and fiscal problems. There are also increasing worries of inflation or even stagflation for the U.S. economy in the coming months.
A move in the September British pound futures above chart resistance at this week's high of 1.3600 would become a buying opportunity. The upside price objective would be 1.4200, or above. Technical support, for which to place a protective sell stop just below, is located at 1.3350.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
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