Dollars To Pounds - Daily Chart GBP/USD 17th July 2009

Dollars To Pounds - Daily Chart GBP/USD 17th July 2009

Yesterday’s candle on the daily chart for the pounds to dollars pair reinforced once again the general mood of this pair at present, exemplified by the spinning top candle thereby created, indicative of general market indecision and lack of any desire to push higher following the last three days of upwards movement.   This candle has subsequently been confirmed in today’s early trading with prices moving lower and in many way creating a characteristic, classic three candle formation of an up bar, followed by the evening star, and completed with a down candle.  The significance of such a pattern should not be underestimated and may well signal a move lower in trading next week which could finally confirm the shooting star of 3 weeks ago which still sits prominently atop the current trading range.  From a fundamental perspective the recent comments by the IMF concerning the UK’s growing debt problem which is now reaching gargantuan proportions, may well prove to be the trigger for a run on the British Pound. Should this occur clearly cable will move dramatically lower against the US Dollar and break away from its positive correlation with the Eurodollar once again.

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