pounds to dollars

Pound Dollar Chart 22 July 2010

The pounds to dollars currency pair appear to be following a similar pattern to the eurodollar and indeed the once strong, positive correlation between the two pairs now appears to have reconnected.  In the case of cable the resistance level is now established at USD1.5472 where we saw a significant pullback in early May and indeed may well see a repeat of this price action following last week’s failure to breach this price handle.  In addition the 200 day moving average is now sitting dangerously close above the current price level, adding to the potential bearish picture in the short term.  However, it is interesting to note that yesterday’s down candle found solid support from the 14 day moving average suggesting that the pair are not quite ready to fall just yet, and for any deeper move lower we need to see a combined breach of the 40 day moving average coupled with a break below USD1.4964 for the move to be confirmed.

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