pounds to dollars

Pounds to Dollars 27 Sep 2010

The pounds to dollars pair ended last week’s forex trading week as a wide spread up candle which just failed to breach the underside of the resistance in the USD1.5834 price region, before closing marginally lower at USD1.5836.  The strong move higher was firmly supported by the 9 week moving average which now sits well above the 40 day, and with the 14 day about to cross the 40 in addition, this is adding further to the current positive sentiment towards sterling. However, it should be noted that Friday’s surge was largely as a result of the recent QE2 rhetoric from the Federal Reserve and general negative sentiment towards the US dollar, as evidenced on the usd index daily chart which remains firmly bearish.  For any continuation of the recent move higher in the pounds to dollars pair we need to see a break and hold above the USD1.5998 price point and should this be achieved then this will add a further layer of support to the present upwards trend, with a potential re-test of the USD1.6515 price level, last seen in late 2009.

With no items of fundamental news today for either the US dollar or sterling expect trading to be relatively desultory with any movement in the pair coming as a result of unexpected news items.