Dollar

Pound vs Dollar - GBP/USD Daily Currency Rates 23rd June 2009

Pound vs Dollar - GBP/USD Daily Currency Rates 23rd June 2009

Today the currency market can best be described as combination of  mirage, mischief and mayhem in equal measure and a circus to boot with the two ringmasters of the ECB and the Federal Reserve currently cracking the whip.  Any attempt to trade on logic, either fundamental or technical is doomed to failure as central banks are simply implementing their desired policies with the major players following suit.  For you and I as mere, humble retail traders and so far down the financial food chain as to be almost invisible even to plankton, we can only stand aside and wait for some sanity to return (which it will do).  Meanwhile on the pounds to dollars chart yesterday’s candle reversed Friday’s gains continuing the sideways consolidation of the last few weeks opening the session above the 9 day moving average and closing marginally below the 14 day, providing us with no sense of present or future direction.  The only thing one can say with any degree of certainty is that until we see a weekly close above 1.66 or below 1.59 then it is impossible to forecast the longer term direction.

To put all this into context the NFP figures released earlier in the month raised the prospect of the Fed having to move sooner on on interest rates rather than later.  This this opinion immediately translated into a jump in the Fed Funds Futures Market, but this view has cooled dramatically, to such an extent that tomorrow’s statement may be a damp squibb and provide little in the way of a clue to monetary policy, quantitative easing or indeed any other aspect of the current economic mess.  As currency traders the only thing we can be clear on is that one cannot fight the FED’s longer term policy and whether they choose to weaken or strengthen the US Dollar you can rest assured the major banks will simply follow suit.  A glimmer of hope is the price action in the Dollar Index where we can at least see what is happening behind the scenes.

To return to the pounds to dollars the only item of fundamental news on the economic calendar for today for the British Pound is the mortgage approval figures by the British Bankers’ Association which rose by 16% year on year.  Meanwhile in the US housing data just released revealed a small rise in existing sales of 2.4% but below expectation – a bit of a curate’s egg.  My trading suggestion for this pair is to stand aside and wait for a breakout of the triangle pattern now forming on this pair.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.