pounds to dollars

Pounds to Dollars 4 Oct 2010

The pounds to dollars pair moved higher in forex trading on Friday, closing as a relatively narrow up candle ending the week of largely sideways consolidation, with the pair confined to a narrow range between USD1.57 and USD1.59.  It is interesting to note, however, that throughout the week the 9 day moving average remained relatively unchallenged and indeed on Thursday and Friday provided a support platform, coupled with the 14 day average, together supporting the lows of each day on the daily chart.  As such, whilst the move appears to be struggling at this level the support being offered by the short term moving averages suggests that we may be preparing for a further leg up in the recent rally with a possible move higher to test the USD1.5998 high of early August, and this would certainly be the case should the US continue to decline as FED monetary policy becomes a reality.  Any break and hold above this price level would then open the way for a possible run towards USD1.6458 where further resistance awaits.  To counterbalance this analysis the longer term moving averages on the daily chart, that is the 40 and 200 day, are just starting to flatten and even slant lower which would suggest market exhaustion at this price level.

The fundamental news likely to impact the pounds to dollars pair is not due for release until the back end of this week when we have an interest rate decision in the UK and non farm payroll in the US.

Dollar still not looking oversold