pounds to dollars

Pounds to Dollars 29 Sep 2010

The pounds to dollars pair struggled yesterday following last Friday’s strong surge higher as the market took a breather at the USD1.58 price handle.  Indeed yesterday’s long leg doji candle which oscillated between USD1.5895 to the upside and USD1.5718 to the downside suggests that we could be seeing a short term turning point for cable as the recent rally runs out of steam in an indecisive market.  It is interesting to note that in the current fundamental environment the pounds to dollars pair appears to one of the few that is failing to benefit from the continued weakness in the US dollar.  Indeed in today’s forex trading we have seen a similar picture once again with the pair oscillating around the USD1.58 price point.  Whilst the short term outlook remains bullish with both the 9 and 14 day averages having crossed above the 40 day, the medium to longer term may seen a turn lower in due course as the pair test the USD1.5998 high of late June which may signal the end of the current upwards move.

With no tier one fundamental news for either sterling or the US today the market will look at tomorrow’s HPI housing data in the UK and the unemployment claims in the US which are forecast to come in at 458k, marginally lower than last week’s 465k.  The only item of news for tomorrow are 2 speeches from Fed Chairman Bernanke who is due to testify before the Senate Banking Committee followed by a speech at the Federal Reserve – a “town hall meeting” with educators in Washington.  We will have to wait and see whether he gives the market any clues as to whether the FED is likely to resume its QE2 programme.

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