Pound Dollar Chart 23 Nov 2009

Pound Dollar Chart 23 Nov 2009

The pounds to usd pair rallied yesterday after last week’s sharp sell off, but failed to recover all the losses of Friday, ending the trading session with an average spread up candle, with a small wick to the upper body, suggesting a degree of bullish sentiment, but not enough to sustain a bullish engulfing signal on the day. Indeed the high of the day seemed to find some solid resistance from the crossing 9 and 14 day moving averages which would tend to support this analysis, and which suggests that we may see Cable move lower and deeper into the resistance area below in the short term as a result. If so, then we can expect a further prolonged period of sideways price action once again at this level with the upper and lower price levels now at 1.68 and 1.59 respectively.

Fundamental news items for the UK is focused on the inflation report hearings by the Governor of the Bank of England and members of the MPC before the Parliamentary Treasury Committee and their comments can lead to a degree of market volatility.  In addition we have had the BBA mortgage approval numbers which came in below expectation and the Business Investment figures which came in slightly better than expected.  In addition this afternoon Mervyn King, along with his deputy are expected to address the House of Lords Economic Affairs Committee and given the effect Mr King’s words had the last time plus coming just before the London close may well add a further layer of volatility to already nervy markets.  Meanwhile in the US the market waits for the preliminary GDP numbers and the CB Consumer Confidence figures – both releases likely to cause a reaction across the markets.  In short perfect intra day currency trading conditions.

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Support & Resistance for Pounds to USD :

S1:  1.6518   R1:  1.6669

S2:  1.6432   R2:  1.6734

S3:  1.6367   R3:  1.6820