Dollar vs Pound - Daily Currency Rates Chart 22n June 2009

Dollar vs Pound - Daily Currency Rates Chart 22n June 2009

Cable ended last week on a fifth day of consecutive sideways movement opening the trading session marginally below the 9 day moving average and closing above, but once again failing to breach the technically important 1.66 price region.  Interestingly prices once again found support from the 9 day moving average maintaining what appears to be a marginally bullish tone as the daily candle chart now adds the finishes touches to a pennant formation, the point of which may be forming in the 1.655 region.  This pattern would suggest that we may see an explosive breakout in due course as prices consolidate further into the point of the pennant and this is very much in line with fundamental expectations where the markets are waiting for a catalyst to provide momentum and direction.  The breakout may well occur later in the week on the back of US fundamental news including the FOMC statements, US GDP numbers and the result of the Treasury Auction, the last of which may prove to be the most incendiary as it may be perceived as a verdict on the long term future of the US Dollar.   With a complete lack of fundamental news on the economic calendar for either the US or the UK price action will simply continue to drift as we wait for these major announcements.

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