Pound Dollar Chart 2010

The pound dollar continues to consolidate in a relatively wide range bound on the upside by USD1.48 and USD1.4250 to the downside.  Friday’s price action ended with a down bar but which found good support from both the 9 and 14 day moving averages suggesting that this pair is not ready to fall further and indeed in this morning’s early trading the price is currently approaching the 40 day moving average in the USD1.48 price zone.  To date this indicator has prevented the price action continuing higher and it will be interesting to see whether this remains the case at the end of today’s trading session.  Any break above this level is now critical as it combines the longer term moving average along with minor resistance at this level and therefore a break and hold here will confirm further short term bullish intent.

With little fundamental news on the economic calendar for sterling markets have been focused on the news that the UK’s new Office for Budget Responsibility has cut growth for 2011 even though the OBR expects lower borrowing in 2010-2011.  This has been coupled with warnings that widespread concern over the possible collapse of a sovereign debtor such as Greece and Portugal could spark a 20% in the FTSE 100 has led traders and investors into Treasury bonds, gold &, surprisingly, UK government bonds.

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