Dollars To Pounds - GBP/USD Daily Candle Chart 29th June 2009

Dollars To Pounds - GBP/USD Daily Candle Chart 29th June 2009

Friday’s candle once again confirmed the sideways consolidation of the last few weeks with the daily chart now forming into a strong triangle, of which Friday’s high further reinforced the upper perimeter.  The low of the day once again found support from the bunched 9 and 14 day moving averages reinforcing my view that when the breakout occurs it will come to the upside.   In a holiday shortened week (I am sure you know Friday is the 4th of July), all the main items of fundamental news on the economic calendar are squeezed into Tuesday, Wednesday and Thursday, the principal ones of which are Non Farm Payroll and ADP on Wednesday.  In addition the current trading cycle is compounded by the Quarter end and also the slow down into the summer months.   The first of these is probably the more important, and in my opinion certainly not a time for the under financed, forex retail trader to be in the market when hedge funds and financial institutions are either squaring their positions or desperately trying to window dress their balance sheets.  Typically during this period the US dollar tends to weaken and coupled with the technical picture outlined above we may well see the breakout from the triangle sooner rather than later.   The strong correlation between the currency market, commodities such as oil and gold as well as the S&P 500 and Treasuries suggests a high probability for increased price action across the board as each impacts the others.  The only items of fundamental news today for the pounds to dollars pair is in the UK where the net lending and mortgage approval figures have been released, both of which coming in below expectation, the first at 0.6bn versus 1.3bn and the second 43k versus 46k.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.