Pounds To Dollars - Daily Candle Chart 25th March 2009

Pounds To Dollars - Daily Candle Chart 25th March 2009

This morning’s 100 plus pip reversal in cable simply confirms the lack of momentum in this currency pair despite the price sitting well above all three moving averages.  Indeed as a result of yesterday’s price action the 9 day has now crossed the 40 day moving average which is generally considered an excellent buying signal.   However, with better than expected core durable data for the US and a somewhat failed Gilt auction this morning the British Pound is still struggling on the fundamental front making any longer term trading very difficult.  As with many other currency pairs the only way to trade this pair at the moment is on an intraday basis buying and selling on short timeframes such as the hour or even the 15 minute chart.  As an example at 10.50 this morning we saw an excellent bearish engulfing signal on the 15 minute chart with prices subsequently falling from 1.4600 down as low as 1.4547, a move which continued until we saw a reversal bullish engulfing signal which on exit from the trade would have yielded around 30 pips.  These are the sorts of trades which you will need to find for the time being or at least until a firmer trend is established for the longer term.

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