Pound vs Dollar - Daily Candle Chart GBP/USD 14th July 2009

Pound vs Dollar - Daily Candle Chart GBP/USD 14th July 2009

An interesting day for the pounds to dollars currency pair yesterday with yesterday’s candle closing the session marginally higher but with a deep lower wick which seemed to find some support above the 1.60 price level.  With such a price action where the bulls have once again bought into the market we may expect to see a possible move higher in trading today, possible helped by a resurgence in US equity markets which are expecting stellar results from Goldman Sachs as the earnings season moves into full swing.  However, this may only be a temporary move higher and should therefore be viewed as an intra day trading opportunity rather than the start of any longer term trend.    With all three moving averages tightly interwoven there is little in the way of analysis that can deduced from the technical indicators at present and we must continue to be patient and wait for any sustained breakout above the 1.66 level or below the 1.60 region.  The shooting star candle of 2 weeks ago still retains its dominant position and until the influence of this candle has been nullified then we must continue to exercise caution for any trend trading opportunities.   All the fundamental news on the economic news for the US is covered on the Eurodollar site and for the UK the main news this morning was the CPI data which came in on target at 1.8%, the first time since September 2007 that UK inflation has dropped below the Bank of England’s 2% target.

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