Pound Dollar Chart 16 Oct 2009

Pound Dollar Chart 16 Oct 2009

Friday’s candle on the pound dollar chart signalled once again how impenetrable this level of resistance may prove to be, with the pounds to dollars pair ending the week and the trading session with a long legged doji candle, which failed to reinforce Thursday’s wide spread up bar, signalling instead a degree of indecision in the move, and a possible reversal lower in the short term. This is a familiar picture and one we have seen many times in the last few months, as the pounds to dollars pair oscillated between the 1.60 and 1.67 price channel, and whilst Friday’s close finished well above all three moving averages, there is little to suggest at present that this is anything other than a short squeeze. With Governor King’s words still fresh in the memory and with the well defined resistance above, it seems unlikely that this ‘rally’ has any great momentum. However, should we see the pair return above the 1.67 price handle once again, then we may have to reconsider our analysis, since any breakout here would suggest a longer term rally higher in due course – we shall see!

The only item of fundamental news on the economic calendar today for Sterling is the Rightmove HPI figures which are expected to show the first sign of house price increases and only a minor release  in the US and a speech from Bernanke (details of which can be found on my euro vs dollar site) today will be day dominated by technical trading.  You can, of course, keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.