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Dollars To Pounds – Daily Forex Chart 1st May 2009

Dollars To Pounds - Daily FX Chart 1st May 2009

Dollars To Pounds - Daily FX Chart 1st May 2009

Yesterday’s shooting star signal in the dollars to pounds pair failed to be confirmed in today’s price action, probably because of thin market conditions due to the May Day Holiday in a number of countries.  In fact the British Pound is attempting once again to break through the 1.50 mark where it has stalled on a number of occasions since early January and only a weekly close above this price point can offer some hope to cable bulls.  Cable was given a boost earlier in the day when UK Manufacturing PMI data came in better than expected at 42.9 against a forecast of 40.2 offering some hope to the UK economy.  However, ISM data in the US also came in better than expected at 40.1 against a forecast of 38.4 suggesting that this sector is also beginning to see the start of a long recovery process.

From a technical perspective it is difficult to draw meaningful conclusions from today’s price action given the lack of liquidity and it may be too early to discount yesterday’s weak signal.  In a normal trading day this would certainly be the case but as today is littered with public holidays which continue into next week we may yet see this candle reveal its significance in due course.  It is interesting to note that the high of today is on a par with yesterday suggesting once again that we are seeing resistance to any move for the time being, but as outlined above we do have to view everything in the context of very low volume.

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