Pounds To Dollars - GBP/USD Daily Candle Chart 22nd July 2009

Pounds To Dollars - GBP/USD Daily Candle Chart 22nd July 2009

The pounds to dollars currency pair was one of the beneficiaries of Ben Bernake’s testimony yesterday, as his comments provided some support for the battered US dollar, which triggered a sell off in the UK pound, with Cable closing the trading session with a wide spread down bar and reversing the gains of Monday. Once again the 1.66 key level which is now gaining in importance with each passing day, proved to be the stumbling block to any move higher, this time helped by the FED Chairman, who concludes his two day ‘mid-term’ report later today in Washington, with all market players now watching and waiting for any surprises.

Technically the pound vs dollar pair remain range bound, with the three moving averages tightly bunched and providing little in the way of meaningful analysis, and until we see a break and hold above the level outlined above, or alternatively a breach of the 1.60 support level now in place, then we seem destined to continue to trade in this narrow channel. If there are any surprises later today then this could spook the markets, and with CIT on the verge of collapse allied to several banks reporting later, this could be the catalyst for some volatile price action.

In the UK this morning there were two pieces of fundamental news on the economic calendar, namely the MPC minutes from the recent BOE rate decision which showed voting to be as forecast at 0-0-9, and secondly the CBI Industrial Order Expectations which came in far worse than expected at -59 against a forecast of -46, and indeed worse that last month’s figures, so the green shoots will have to wait a while longer I’m afraid ( poor old Gordon)

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