GBP/USD Daily Candle Chart - 24th February 2009

GBP/USD Daily Candle Chart - 24th February 2009

The headline says it all really, with the pounds to dollars currency pair continuing its sideways consolidation of the last few weeks, forming a strong pennant pattern. Until we see a breakout from this pattern, then the pair are very difficult to trade at the moment, and the only strategy I would suggest is using options and a straddle, and wait until we see a breakout, either to the up side or the down side. On the fundamental news front, the CBI realized sales figures were released this morning and came in better than forecast at -25 ( the forecast was for -52) although this had little impact on the pair, which are more heavily influenced by global conditions and world equity markets. The CBI figures are another of the many so called diffusion indices, and is considered a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The data is collected from a survey of around 150 retail and wholesale companies which asks respondents to rate the relative level of current sales volume. A figure above 0 is for sale figures increasing, and a negative number is a decline. Here we have a -ve number but better then expected giving a small lift to sterling. The main news is out shortly in the US, and I have covered this for you on the euro to dollar site.

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