Pound Dollar Chart 24 March 2010

The UK Chancellor duly delivered his final budget before the general election which was greeted by the currency market with a degree of scepticism as the pounds to dollar pair fell sharply during today’s trading session.  It was particularly interesting to note that a minor rally ensued once the Chancellor had sat down which was then promptly reversed during the response by the leader of her Majesty’s Opposition.  As a result we are currently trading at USD1.4898, well below all four moving averages and now approaching our key level of USD1.48 which may well be achieved later today or tomorrow.  As outlined in yesterday’s currency market analysis once this level is breached then expect to see the pounds to dollars pair fall sharply to re-test USD1.45 and below.  With the solid price congestion now in place between USD1.50 and USD1.53 any reversal is likely to be short lived and should therefore be seen as further opportunities to place short sterling positions on any upswing.  The longer term outlook remains heavily bearish with USD1.40 our longer term goal.

The only significant items of fundamental news were in the US where the New Home Sales came in worse than expected at 308k against a forecast of 318k whilst core durable goods orders came in marginally better than expected at 0.9% against a forecast of 0.6%.

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Pounds to Dollars News :

UK downgrade moves closer