Pounds To Dollars - Weekly Candle Chart 16th February 2009

Pounds To Dollars - Weekly Candle Chart 16th February 2009

Following last weeks candle we now have a clear bearish engulfing trading signal for this week, with the wide spread down bar wrapping around the up bar of the week before. This is the second such signal in the last 2 months, which will tend to suggest we should expect to see lower prices this week. To add some weight to this decision the price move of last week crossed below all three moving averages which are now weighing heavily on the pounds to dollars pair, and it is important to note that the previous support level at 1.4500 has now bee penetrated with the close on Friday. My suggestion for this week for the longer term trades is to attempt short positions with a stop loss above at 1.5000 or above, and to use the daily chart for your entry and exit positions. Please remember that today is a holiday in the US, so markets will be thin, and I would suggest you wait until the morning before entering any new positions.

The fundamental news this week will be dominated by two pieces of news in the UK. The first is the release of the MPC minutes on Wednesday and then on Friday we have the all important Retail Sales figures.The MPC minutes provide the breakdown of the MPC members’ votes, and tends to be the most important part of the minutes. The vote is reported in an 2-3-4 type format. The first number is the how many voted to increase rates, the second number is how many voted for a rate reduction, and the third is how many voted to keep rates on hold. The statement provides a detailed view of the Bank of England’s  most recent meeting, providing in-depth insights into the economic conditions that influenced their vote on where to set interest rates, and offering clues on the outcome of future votes, which is eagerly awaited by traders and the markets in general. The forecast is for a vote of 0 – 9 – 0 , the same as last time.

On Friday in the UK we have the Retail Sales figures which provide a view on the change in the total value of inflation-adjusted sales at the retail level which provides a primary gauge and view on consumer spending, which accounts for a majority of overall economic activity. The forecast is for 0% against a previous of 1.6%. The main fundamental news for the US dollar is available here – euro to dollar.  If you would like to see the main economic data releases for the week then please just follow the link here – weekly economic calendar.

The short term outlook is bearish, the medium term is bearish and the long term is sideways.