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Busch: My Money in Motion Trade

Wednesday, 21 Mar 2012 | 12:13 PM ET

Friday on CNBC’s Money in Motion (click here for the segment) I recommended a GBPUSD trade with supporting information:

Sell GBP/USD

  • Entry 1.5925
  • S/L 1.6025
  • T/P 1.5650

• UK has their budget announcement and it will highlight how little the government can do with threat of AAA downgrade.

• FT article makes the case for a BOE LTRO.

• Bank of England minutes should show concern for weak economic growth.

So far, what I was looking for has happened as the BOE voted 9-0 for easing (vse 7-2) and the UK public sector net borrowing was double what was expected at 15.2bln GBP. This underscores the key negative dynamic in Europe: slow/negative growth=lower tax receipts=increased borrowing needs=higher debt totals.

Overall, this trade has worked well as the high was 1.5924 and you should’ve got this trade on. As I’ve been stating, you have to be flexible with entry points to ensure you get the trade on and don’t miss it. Use +/-10 points on these trade suggestions as a good rule of thumb.

Andrew B. BuschDirector, Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a contributor to CNBC's Money in Motion Currency Trading.You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch .

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top strategies are broken down for you in Currency Class.

Talk back: Tell us what you want to hear about at moneyinmotion@cnbc.com.

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