Pounds vs Dollars - Daily Candle Chart For Currency Rates 6th August 2009

Pounds vs Dollars - Daily Candle Chart For Currency Rates 6th August 2009

Much like its cousin, the euro vs dollar, the pounds to dollars currency pair too paused for breath yesterday, but ended the trading session ending on a spinning top candle.   Such a candle following on the back of the doji candle of Tuesday may suggest a degree of weakness on the daily chart and we would be wise to take note of this particular signal as it may indicate the start of a short term reversal lower.  Whilst I do not expect this to have any great depth nonetheless it would seem to suggest that the pounds to dollars pair has temporarily run out of steam and the British Pound may be slightly overbought at present.  In addition the market is waiting for the BOE rate decision which is widely expected to remain on hold at 0.5%, although the associated statement will probably have more impact than the decision itself.  In particular, the markets will be looking towards the quantitative easing aspect and any signal that the Bank is considering raising rates in the longer term.  With all three moving averages pointing higher and with the strong platform now below the bullish picture is still intact, and any short term pullback should be seen as a buying opportunity for the British Pound.

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