pounds to dollars

Pounds to Dollars 10 Nov 2010

Unlike the euro vs dollar, the pounds to dollars pair has recovered much of yesterday’s lost ground which saw cable extend losses for a third trading session ending as wide spread down candle with small wicks to both the top and bottom.  Yesterday’s price action closed marginally above the USD1.60 price handle which coincided with a deep platform of support and, in addition, the low of the day at USD1.5951 also found strong support from the 14 day average which prevented a further fall.  Indeed this hinted at a possible recovery which duly arrived this morning with cable trading higher at USD1.6098 at time of writing and looking likely to hold above the 9 day moving average.  If this does indeed occur then this will signal a resumption of the longer term upwards trend and, as such, we can then expect to see the pair re-test the high of last week at USD1.6299.  Both the 14 and 40 day moving averages continue to point sharply higher and with the 200 day now beginning to turn this is adding further weight to our analysis.  However, the key point is to ensure the market closes all four moving averages and once complete then we can expect to see the pounds to dollars pair recover much of the last ground of the past few days as a US dollar decline resumes once again.

Sterling at six week high following BOE inflation report