Dollars To Pounds - GBP/USD Daily Chart 30th June 2009

Dollars To Pounds - GBP/USD Daily Chart 30th June 2009

Yesterday’s doji candle on the pounds to dollars chart continued to reinforce the triangle pattern which is now extremely well defined and converging in an ever tighter point towards the 1.65/1.66 price region with the 9 and 14 day moving averages now superimposed.   This picture has been dented somewhat by this morning’s price action where a severe dose of reality has suddenly shaken the markets following the Pound’s attempt to break out of this narrow trading range and may well have been dealt a body blow by the truly appalling GDP figures released this morning.  The numbers confirmed that the UK economy has contracted at a much faster pace than initially thought (some much for those pesky green shoots”) and fell at its fastest rate for almost 50 years in Q1.  Over the year GDP fell almost 5% on the year – again the worst since records began.   Even the somewhat benign Nationwide HPI data failed to stop the runaway train which has seen the pound to dollars fall almost 300 pips.  In addition Cable was not helped by comments from the OECD who have stated that any recovery for the UK depends on stability returning to the financial sector and the Government coming up with a “credible” plan to deal with the budget deficit.   All the US data is covered on the main Eurodollar site.

Technically as mentioned in yesterday’s market commentary for any bullish higher we need to see a break and hold the 1.66 price region which has now become the defining technical level for this currency pair.  Had this morning breakout managed to hold then this may well have been considered the defining day for the pattern but given the likely conclusion to today’s trading session, this now seems highly unlikely.

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