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Forecast for the GBP/USD – 1st November 2010

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Pounds to Dollars 1 Nov 2010

The positive sentiment following Thursday’s wide spread up bar spilled over into Friday’s forex trading session with cable continuing its recent upwards momentum, breaking and holding above the psychological USD1.60 level to end at US1.6044.  On the day, cable recovered from a low of USD1.5876 as dollar weakness resumed once again and the candle created ended with a deep lower wick further confirming the bullish intent, which has continued in early trading this morning and taken cable to USD1.6075 at time of writing.  The moving averages below remain firmly supportive of the upwards trend at present and once the 9 day average crosses above the 14 day once again then this will complete the picture as we see cable begin to penetrate the deep resistance now ahead between the current price level and USD1.67.  Given the FED meeting where the QE2 is to be unveiled, we can expect to see sustained dollar weakness and a consequent move higher for the British Pound and the momentum generated by this release may be sufficient to propel the pair beyond the upper resistance area at USD1.67.