Pounds vs Dollars - GBP/USD Daily Candle Chart 21st July 2009

Pounds vs Dollars - GBP/USD Daily Candle Chart 21st July 2009

Yesterday’s wide spread up candle for the pounds to dollars pair, provided further evidence that the UK pound remains determined to try to breach the 1.66 level, as it creeps ever higher in small steps on the daily chart, and probably confirming that the shooting star candle of three weeks ago can be ignored as a failed signal. With the 9 day moving average breaking free from the recent bunching of the moving averages, we may now see yet another attempt to breach this key level, which has poved to be a difficult obstacle to date, however, the fate of Cable, and of the US dollar will now largely depend on the comments and tone from Fed Chairman Ben Bernanke as he gives two days of testimony in Washington, on the US economy and monetary policy moving forward. As we can see from the dollar index chart, the US dollar is heavily bearish, and any positive or upbeat statements from Bernanke could tip it over the edge and into free fall, as investors rediscover their appetite for risk and rush headlong into the equities markets, with a consequent sell off in the US dollar. This remains to be seen as the markets now wait for the New York open and the start of his opening comments and remarks. With the pounds to dollars pair now perched at the 1.66 level, the next two days could prove decisive in dictating the future direction for the dollar vs pound currency pair.

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