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Pounds to Dollars – Chart Analysis 18th February 2010

dollar vs pound currency exchnage rate daily chart

The pounds to dollars pair remains bearish despite the  attempt to rally higher on Tuesday, with yesterday’s wide spread down candle firmly establishing the medium term trend once again, reversing all of the gains of the previous day. The downwards pressure has increased further in the London trading session this morning as we move below the 9 day moving average once again, and any break below the short term support area now in place at 1.5550,  will signal a much deeper move for Cable in due course. With the deep resistance now firmly established above, the current sideways consolidation will prove to be critical and should this be breached in due course, as I expect, then a retest of the 1.50 price handle seems likely in the medium term.

This morning’s release of the UK public sector borrowing figures have certainly not helped the pound, coming in at a net 4.3 billion, and pushing the UK debt to an eye watering 848.5 billion pounds or almost 60% of GDP – staggering in normal circumstances, but one we have become used to over the last few months!! The forecast was for a net repayment of 2.8 billion so hardly a surprise that Sterling is under pressure in London trading today. In the US this afternoon we have PPI, weekly unemployment claims and Philly Fed data, and should these produce better than expected results then the pound could come under further pressure as a result and slip below 1.55 in due course.

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