Pound the Aussie? or Aussie the Pound!

My mentor "Tripod" emailed me today alerting me to hedge the AUD vs the GBP. However, I could not bring myself to do it - because I thought this was too inherently risky. Here is an excerpt of our conversation.

Tripod's View:

Tripod was of the view that you had to take a strong position of the pound having had a look at the chart trend and the strengthening of the GBP.

Graphique

In addition to this, the latest UK government change (decreased political risk) and the indication of a strengthening of the dollar.

My View:

I have an aversion to the UK economy at the moment. Maybe it's because of my impending trip there - and the fact I like to keep my expectations quietly low.

Taking a look at the FTSE - which I believe is a true proxy of performance at it's best, the following graph shows weakness

Chart

To me there is no technical resistance to speak of, and very little fundamental support to the UK economy.

What does that mean? It means that the weakness in the FX rate above to me is from weakness in the AUD.

Graphique

The AUD looks quie stable at the .80-.85 range to me. Thus I'm really reluctant to touch the AUD GBP because I think it's probably on its way down.

The Conclusion:

A gentleman's bet between my mentor and myself. Loser takes the winner to coffee... all in the sake of learning!

Got a Question? Send it over! Leave a comment!

What's Up Jono www.whatsupjono.com Finance, Breaking News, Charts, Trends, Opinions
at
Labels:

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)
DISCLAIMER

Although information and opinions are covered in this blog it is not the express intent of the writer(s) that readers take opinion as advice. We are not liable for any actions that come from any topics covered and would like to clarify that whatever opinion that is voiced in the blog is of a general nature and not to be followed without the help of a professional advisor. For any specific advice please seek the advice of a professional financial advisor.