Poun

Pound Dollar Chart - 12th January 2010 Currency Exchange Rates

Pound Dollar Chart - 12th January 2010 Currency Exchange Rates

Yesterday’s price action in the pounds to dollars pair continued to the theme of last year which in essence is a sideways consolidation between the lower level at USD1.58 and the upper level at USD1.67, with the candle ending the trading session marginally gapped up and as a narrow spread up bar.  The last few trading days would appear to suggest that we are witnessing yet another bounce from the lower level of the current trading channel with the pounds to dollars pair breaking back above the USD1.61 price handle and now approaching the more stubborn resistance in the USD1.62 price region.  Whether this next “wave” will have sufficient momentum to carry the price back to USD1.67 is debateable and indeed yesterday’s candle finished with a deep upper wick suggesting that any bullish tone is somewhat muted at present.  For any move higher we will need to see a break and hold above USD1.63 coupled with a breach of the 40 day moving average and should this be achieved then we can expect a further period of consolidation.

With no significant items of fundamental news in the UK today we only have the trade balance figures due at 14.30 GMT which are expected to come in at -34.9bn, against the previous of -32.9bn, a positive number indicating that more goods and services being exported rather than imported & vice versa.

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