GBP/USD (FXB) Signal - August 19, 2013


By: Andrew Keene

The pound remained higher against the dollar as concerns over the timing of possible tapering by the Federal Reserve. The pound hit 1.5672 during U.S morning trade, the pair’s highest since June 18; as the latest UK economic data was again stronger-than-expected with retail sales rising 1.1% in July, from 0.2% the previous month. The warm weather conditions during July provided retail sales with a significant boost. However, the pound remains under pressure on rising concerns over current tightening in the UK markets as well as the Fed’s upcoming decision on tapering. This indecision and uncertainty were reflected in the stock market's closing levels and in currency price fluctuations. The pound is likely to find support at 1.5606 Friday’s low of 1.5606, and resistance at 1.5722, the June 18 high.

My Trade: Buy the FXB Sept 155-157 Call Spread for about $0.60

Risk: $60 per 1 Lot
Reward: $140 per 1 Lot
Break-even: $155.60

Delta: Long
Gamma: Long
Theta: Short
Vega: Long

Andrew Keene spent 10 years as an independent equity options trader on the Chicago Board of Options Exchange, during which he spent the majority of his time as a market-maker for over 125 stocks. Andrew currently trades futures, currencies and commodities. When he's not trading, Andrew appears on top business television shows including CNBC's Squawk on the Street, Street Smart on Bloomberg TV and First Business, a show that is syndicated across the United States. Andrew graduated from the University of Illinois with a degree in Finance with a concentration in Accountancy.