dollars to pounds

Pounds to Dollars 26 Aug 2010

Like the eurodollar the pound vs dollar pair continues to cling onto its recent short term gains but increasingly looks to be weak.  This has been evidenced in trading this morning during the London session with an attempt to rally having been capped by the 14 day moving average, just below USD1,5600 at USD1.5589 with the pair currently trading lower at USD1.5524 at time of writing.  This is a pattern we have seen several times of the past two weeks with the consequent candles closing with deep wicks to the upper body and, in particular, both the 9 and 14 day moving averages have been pre-eminent in determining the price direction for the pair.  In the medium term a break below the recent lows of USD1.5372 will signal a continuation of the downwards trend of August and once achieved expect to see USD1.5241 re-tested with a possible below USD1.50 to USD1.4964 in the medium term.

Today’s fundamental news for the pounds to dollars has been limited to CBI realised sales for the UK (better than expected) and the jobless claims in the US (also better than expected) which appears to have buoyed the wider markets.  However, trading in the pounds to dollars is likely to remain in a relatively tight range today as the markets wait for tomorrow’s GDP data from both the UK and the US.  In addition the annual Jackson Hole shindig for the great and the good gets under, although given their lamentable performance in either predicting or preventing the present financial crisis one is left to wonder whether a spell in rehab might not be more beneficial for them (and us)!!

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