Dollars to Pounds - Pound Dollar Spot Market Chart 11th May 2009

Dollars to Pounds - Pound Dollar Spot Market Chart 11th May 2009

Friday’s generalised US Dollar weakness caused many currency pairs to benefit as a result and the dollars to pounds pair was one of these ending the day on a wide spread up-bar and providing a bullish signal on several levels.  Firstly the close of the day ended well above the established resistance in the 1.51 region suggesting that we are now likely to see a sustained break out possibly moving as high as 1.57, a price last seen towards the end of 2008.  Secondly, the up candle engulfed Thursday’s down-bar suggesting once again a positive tone, and finally the low of Friday bounced neatly off the 9 day moving average indicating strength in the move once again.  With little fundamental news on the economic calendar for today either in the UK or the US we will have to wait until tomorrow when the stream of news picks up starting with manufacturing production in the UK and trade balance figures in the US followed in the middle of the week with a speech from BOE (Bank of England) Governor King and their inflation report which I will cover in more detail as we move forward.  My trading suggestion for today is now to look for longer term trending opportunities buying into the market on any short term inter-day reversals of which this morning has already provided some interesting opportunities, with an initial target of 1.55, and if we move above this build further positions looking to target 1.57. It will also be important to watch the US dollar index for further signals of direction for the US dollar.

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