Dollars To Pounds - Daily Forex Chart 12th May 2009

Dollars To Pounds - Daily Forex Chart 12th May 2009

As outlined in yesterday’s commentary the narrow spread down bar provided excellent buying opportunities in the dollars to pounds pair, in preparation for our longer term trend trading which has now been set in motion this morning with a wide spread up bar following better than expected fundamental news on the economic calendar for the British Pound.  With all three moving averages now pointing higher and with the low of this morning bouncing off the 9 day moving average we are now looking at a sustained break higher with an initial target of 1.55 which we should achieve in the next few days.    With sustained dollar weakness now evidenced in the dollar index chart this is likely to increase the upwards momentum in the pounds dollars pair as the British Pound is now generally considered “under valued” in the market.   The fundamental news in the economic calendar for the British Pound covered manufacturing production and trade balance, both of which came in better than expected and attention now shifts to the US where we have the Trade Balance figures for the US where we have a forecast of -29.2bn against a previous of -26bn.

My trading suggestion for today is to continue to add to your long positions, buying on any dips with a medium term target of 1.55 and a longer term target, should the trend continue to 1.57.

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.