pounds to dollars

Pound Dollar Chart 8 July 2010

Once again yesterday the pounds to dollars pair struggled to breach the USD1.5227 price handle which is now forming a critical level of potential resistance to any move higher with yesterday’s candle closing as a small doji cross, indicative of an indecisive market and one that has run out of momentum.  In the Asian forex trading session this price action has been replicated once again with the pair attempting to break above USD1.5241 and at the time of writing trading at USD1.5162.  Even though sterling continues to trade above all short term moving averages the rally of the last few months now appears to be losing momentum, particularly as we run into stiff resistance between USD1.5250 and USD1.55 to the upside.  Any move lower will need to breach both the 9 and 14 day moving averages and if this is coupled with a break and hold below USD1.50 then we could see a complete breakdown and a return to the longer term bearish trend in due course.

Today’s fundamental news is focused on the interest rate decision in the UK where some analysts are beginning to mutter about a rise as evidenced by last month’s voting split on the MPC while in the US we have the unemployment claims and crude oil inventories.

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