pounds to dollars

Pounds to Dollars Chart 20 July 2010

The failure of cable to breach the USD1.5472 price point both on Thursday and Friday last week now appears to be gaining increasingly significance as a potential turning point from the recent rally of early May.  Yesterday’s narrow spread down bar further confirmed this potential signal with this morning’s price action in the London forex trading session reinforcing this view once again with an attempt to rally promptly quashed and the pair trading below both the 9 and 14 day moving averages at the time of writing.  The price area outlined above was the same as that which prompted a reversal lower in mid April sending the pair sharply down and eventually reaching a low of USD1.4227.  For this reversal to be confirmed we need to see a break and hold below USD1.4873 which will also coincide with penetration and a breach of the 40 day moving average.  Should these factors combine then expect to see cable pull back sharply and a re-test of USD1.4237 would then be increasingly likely.

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