The Chart du Jour
Some of our favorite currency crosses of past years have involved pairings such as CAD/DEM, AUD/JPY, AUD/CHF...not your average fare grant you, but often interesting in their structure more so than the obvious charts that everyone looks at. Today, we want to focus on yet another somewhat oscure cross: GBP/AUD and how it appears on the charts both long term, short term, and in relation to another old favorite GBP/DEM - now replaced of course in interbank trading by EUR-GBP.
First of all, a longer term picture:
It would appear to us that GBP/AUD had an impulsive move down in either a 1 or A Wave, and for months now has been tracing out a substantial a-b-c 2 or B wave bounce. Another plunge looks probable in either a 3 or C down.
When one zooms in on the daily chart, a break of the uptrend in GBP/AUD looks imminent.
But hold on a second. For a few days now we have been suggesting that a low is likely to form in the euro near 90.42 -- equivalent to the old DEM level of 2.1620. How can we be bullish the euro, but bearish GBP/AUD, when the euro and the pound tend to trade with relatively similar strokes as European currencies? The fallout of course, is that we are also bearish GBP/DEM, bullish EUR/GBP.
Although the wave count on the old GBP/DEM chart does not look quite complete (perhaps now ending a iii of 5), we just touched 3.40 -- a level that anyone who has traded foreign exchange for any period of time will recognize as damn high in this cross. For comprison, George Soros broke the Bank of England's defense of the pound in 1992 way down at approximatively 2.75, on the way to 2.18. At current levels, can the British economy export anything anymore? The present level of their currency can only be stultifying for their economy longer term.
Meanwhile, we pictured the AUD/USD chart by itself earlier this week, and it looked like a complete 5 waves down. So the fallout to us means that one should consider short GBP/AUD together with long euro positions. Alternatively stated, this is also the same of course as short GBP/DEM (long Eur/GBP) and long AUD/USD. The combined picture of these various charts clearly suggests that change is in the wind -- with the AUD and euro likely to replace the pound and U.S. dollar's previous leadership positions.
Please support Sand Spring Advisors and purchase one of our more in-depth articles below.
How Your Articles Are Delivered
Upon the processing of your credit card or the receipt of a personal check, Sand Spring will e-mail you the articles requested as a Word attachment, and also provide you with a WWW address and password to view the article on the web without using Word should you so desire. Confirmation of your order will be immediate, and the actual article will follow by e-mail typically within a few hours and in all cases before the opening of NYSE trading on the following day.>
Ordering by Credit Card:
Our shopping cart is designed for both physical and subscription products, so do not be confused too much when it asks you for a shipping address. A correct address is important only for credit card authorization purposes. Your e-mail information is the most important piece of information to us for proper delivery of your article(s).
Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.
Take me back to the Sand Spring Home Page
Comments or Problems
Thank you for visiting Sand Spring Advisors LLC, Inc. We hope to hear from you again soon. For more information on Sand Spring Advisors actual programs, services, or to request a copy of a Disclosure Document, please phone us at 973 829 1962, FAX your request to 973 829 1962, or e-mail us at information@Sandspring.com
10 Jenks Road,
Morristown, NJ 07960
Phone: 973 829 1962
Facsimile: 973 829 1962
Best Experienced with
The material located on this website is also the copyrighted work of Sand Spring Advisors LLC. No party may copy, distribute or prepare derivative works based on this material in any manner without the expressed permission of Sand Spring Advisors LLC
This page and all contents are Copyright © 2000 by Sand Spring Advisors, LLC, Morristown, NJ