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Pounds To Dollars – 2nd March 2009

Pounds To Dollars - 2nd March 2009 Weekly Candle Chart

A glance at the weekly candle chart for the pounds to dollars currency pair is enough to confirm what we already know from the daily charts, in that the pair are consolidating sideways, with a skew to the downside, a view reinforced this morning with the gap down in early trading. The doji candle of last week did little to help clarify the situation and an it would be naive to suggest that this represents indecision in the market. Of far more significance is the resistance level that has now been formed in the 1.4500 region, and for any significant reversal we will need to see this area breached for any move back towards 1.5000 and above. With all three moving averages pointing lower, I would expect to see a retest of support in the 1.3500 region in the next few weeks and should this be penetrated then we could see a further fall, possibly as far as 1.2850. My advice of the last few weeks remains the same, which is simply to stay on the sidelines and wait for firm trading signals to appear. Trading the spot market with simple buy and sell order is extremely difficult at the moment with stops being taken out in any whipsaw as the erratic price behaviour continues. As an alternative consider using a straddle strategy with currency options or a fixed odds trade using a no touch position.

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