dollars to pounds

Pounds to Dollars Forex Chart 5 Aug 2010

The price action in the pounds to dollars pair mirrored that of the euro to dollar, in other words desultory and confined to a very narrow trading range.  This comes on the back of both Tuesday’s and Wednesday’s price action which created a small tweezer top at the USD1.5968 level, suggesting a short term pullback for cable as a result.  With non farm payroll now on the horizon any reversal could be triggered by better than expected figures tomorrow and should these follow Wednesday’s ADP numbers then this indeed will be the case with subsequent strength in the US dollar.  The psychological USD1.6000 level now appears to have been established and tomorrow’s nfp data could be critical to the longer term upwards trend as a result.  Should tomorrow’s release send the pounds to dollar lower with a breach of the 9 day moving average then this could be the first signal that the recent bull trend from mid May is now beginning to peter out as the pair begin to run into deep and sustained resistance above.

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MPC holds rates at 0.5%