pounds to dollars forex forecast

Pounds to Dollars 30 Sep 2010

The pounds to dollars pair paused yesterday, taking yet another breather in the USD1.58 price region, before pushing higher once again in this morning’s early trading as the US dollar continues to come into sustained pressure once again as evidenced in the usd index daily chart.  The technical picture for cable still remains firmly bullish with the 9 day moving average in particular offering strong support to any re-test to the downside as evidenced in both Tuesday’s and Wednesday’s forex trading sessions.  Below this the 14 day average is also providing an excellent platform of support and now having crossed above the 40 day average, is giving us a further bullish signal.  With cable now trading well above all four moving averages the key target in the short term is the high of early August which saw the pair touch USD1.5994 before pulling back to trade sideways for most of September.  For any continuation of this current rally we need to see a break and hold above this level, at which point we then begin to run into deep and consistent price congestion created throughout much of 2009 which sits between USD1.60 and USD1.67.  Ultimately, this region could present an insurmountable barrier to any further move higher and will indeed require some sustained momentum to breach.  Provided the US dollar continues its progress lower, which seems likely at present, both from a technical and fundamental perspective, then we may see this breached in due course.

This morning’s fundamental news for the UK was the release of the Nationwide HPI data which provided a small lift, coming in marginally better than expected, at 0.1% against a forecast of -0.3%.  This afternoon sees the unemployment data for the US which is forecast to show a modest fall from 465k to 458k this time around.