Pounds Dollars Monthly Chart - 2nd February 2009

Pounds Dollars Monthly Chart - 2nd February 2009

Now the monthly pounds to dollars chart is much more interesting, as following the price waterfall from August 2008, last months candle provides some evidence that we may have reached a significant turning point for the gbp usd currency pair. The reason is very simple, as on the chart we now have a long legged doji candle, with a spread of almost 1000 pips. A candle of this size and strength will almost always be the first sign that the price trend is about to reverse, with indecision in the market, as buyers and sellers battle for control of the currency. As always, with any of our trading timescales we need to wait for a confirming signal, but this could be the first sign that the pound dollar pair are about to reverse and start moving back up – this will not happen straight away, but we should now add this piece of information into any long term trading decisions.