Pound Dollar - Daily FX Chart April 20th 2009

Pound Dollar - Daily FX Chart April 20th 2009

With a total absence of any fundamental news on the economic calendar relating to the British Pound the currency market has taken it upon itself to punish cable in advance of the budget on Wednesday when Chancellor Darling is expected to confirm possibly the worst economic picture for the UK, ever.   As I suggested in last week’s market commentary a failure to close on the week above the 1.50 price point would be a bearish sign and this indeed has been confirmed in this morning’s trading session with prices falling heavily to the 1.45 region.  In addition I also suggested that we could even see a move back to re test the lows of 1.42 in due course which may now happen sooner rather than later, so I hope you followed my suggestions last week.  One item of fundamental news just released in the US is the CB Leading Index, a composite of 10 economic indicators.  The forecast was for -0.2% and it has come in marginally worse at -0.3%.

From a technical perspective much will depend on the close tonight as to whether this short term reversal to the downside continues or whether it is simply a market reaction to a lack of fundamental news and the budget.  Any break below the 40 day moving average will confirm the trend, in which case we could see the move to retest the region outlined above.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live charts by simply following the links.  I have also included details on an excellent ECN broker.