Pound dollar forecast

Pound to Dollar Chart 22 June 2010

The pound dollar continues to trade in a narrow range and marginally above our three shorter term moving averages but well below the 200 day moving average.  Whilst yesterday’s candle gave a bearish signal of weakness this has been largely offset by today’s price action with the markets concentrating on the UK budget statement which do not appear to have affected the price action to any great degree.  Cable is trading marginally higher and has reversed this morning losses with the 40 day moving average providing support to the low of the day as the markets absorbs the UK’s strategy for halting & reversing its deficit.  For the upwards move to continue we do need to see a dramatic change in momentum which does appear to be lacking at present.

Aside from the budget in the UK we have the Existing Home Sales in the US followed tomorrow by the MPC minutes in the morning and, of course, the FOMC statement in the evening.

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Financial Markets react to UK Budget