Pounds to Dollars Daily Chart - 27th June 2009

Pounds to Dollars Daily Chart - 27th June 2009

Yesterday’s candle on the pounds to dollars pair added further weight to the consensus view, that any breakout from the current pennant formation, when it comes, will be to be to the upside.  The reason for this analysis is simply that in the last 10 days of sideways trading five of the candles have deep lower shadows of which yesterday was yet a further example.  In addition this opinion is reinforced by the fact that yesterday’s close found good support at the intersection of the 9 and 14 day moving averages and this positive signal has converted into a strong move higher in trading today.  The defining level remains the same as mentioned in many of my previous commentaries, at the 1.66 region and only a weekly close above here will ensure the move to the upside that we expect.  A look at the longer term charts (ie monthly) shows why it is taking so long to break through this substantial barrier.  If and when this does occur the next upside target is in the 1.70 region.  My trading suggestion is to look for small long trades using the 5 min chart using tight stops and aiming for small profit target.

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