As the US debt situation drags on the British Pound has reversed course. Less than two weeks ago, July 12, the September Pound was in a solid down trend and pushed against 15750. As "negotiations" in Congress has dragged on, the Pound made it to 16325 last week and is currently trading at 16275. We will get a deal done albeit a short term marshmallow deal, but it should be enough to push the Pound back to the 15750 level once again. Since the deal is to be done on or before August 2, I am recommending an inexpensive August put option which expires on August 5.
The Trade: Buy the August 16000 British Pound Put Option at 24 points or better ($150 at $6.25 a point)