Pounds vs USD 25 Feb 2010

The pounds to usd chart remains firmly bearish with both the 9 and 14 day moving averages providing strong resistance to any upwards move. Sterling was helped lower following BOE Gov King’s comments earlier in the week which clearly indicated the true picture of the economic recession and which is somewhat at odds with the UK government.  Yesterday’s narrow spread down candle once again closed below all three moving averages and the downwards pressure on cable has continued in early trading with the pair currently approaching the USD1.53 price handle.  With the deep price congestion now above and all four moving averages pointing sharply lower the medium term outlook remains heavily bearish with USD1.5 our short term target and should this be breached then expect a much deeper move to re-test USD1.4650 and below in due course.

This morning sees BOE Gov King appearing before the Banking Commission Hearing on the future of banking which since the above chart was prepared has fallen further to USD1.5289 and looks set to plunge even further.  Later this morning we have the CBI realized sales forecast at -1, better than last time at -8 but still showing negative growth closely followed by Core Durable Goods and the unemployment numbers in the US.  The day rounds off from further testimony from Ben Bernanke so an interesting day in prospect.
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Pounds vs USD News

Prospect of Further QE affects sterling

Sterling faces “savage” reaction if deficit cut too aggressively

Bernanke signals further low interest rates