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Pound to Dollar Forecast

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Pounds to Dollars Chart 4 Nov 2010

The pounds to dollar pair has finally pulled away from the USD1.60 price level following yesterday’s FED statement ending the forex trading session as a relatively wide spread up candle closing at USD1.6106 and as such holding above the key USD1.6089 price handle.  As such we now have a deep platform of support at this important level which should provide the springboard for a sustained and longer term trend for cable as a result.  This bullish sentiment has spilled over into today’s forex trading session, helped further by the UK fundamental news, which has propelled the currency pair through the USD1.62 price zone to trade at USD1.6264 at time of writing.  The longer term outlook remains firmly bullish now that this breakout has been established and with the 9 day average now crossing above the 14 day average this is adding further weight to our analysis.  Looking ahead the US dollar will continue to decline over the next few weeks as the bond purchase programme gets under way, and should we see a breach of the USD1.6877 high of late 2009 then this could provide a further platform as the trend builds further and on towards the 200 week moving average which currently resides at USD1.75 on the weekly chart.  Tomorrow sees the monthly non farm payroll release which is expected to come in at 63k against last month’s -95k, with Wednesday’s ADP figures suggesting that the employment news may be mildly positive.  The headline unemployment rate is expected to remain flat at 9.6%.

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