Pound Dollar Chart 11 Nov 2009

Pound Dollar Chart 11 Nov 2009

Fakeout or breakout – this is the question for the pounds to dollars pair at present, with yesterday’s wide spread down candle suggesting the former, although it should be noted that the low of the day found good support from the 9 day moving average below. However, with the three candle pattern of a wide spread up candle, followed by a hanging man which has now been confirmed by yesterday’s price action, this is not a positive signal for sterling bulls,even though the low of yesterday failed to breach the price congestion below to any great extent. For today and the next few days, the key will be whether this short term bearish signal is further confirmed with a move deeper once again, and if so we can then assume that this was yet another in the continuing and interminable sideways price action at this level for the dollars to pounds pair. Trading the pair at present is extremely difficult and limited to intra day price moves, swing trading in the medium term or straddle option strageies as we wait for the inevtiable breakout from the current narrow trading range.

With no fundamental news on the economic calendar for the UK the forex market will be looking to the US where the unemployment claims and crude oil inventories are expected.  Whilst a great deal of yesterday’s price action can be attributed to thin holiday markets Mervyn King’s comments following the BOE’s Quarterly Inflation report have, once again, played their part.  Indeed this week has seen a plethora of comments from the great and the good on currency matters.  This afternoon is no exception when Geithner is due to hold a press conference at the Asia-Pacific Economic Cooperation Finance Minister’s Conference in Singapore.  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.

Support & Resistance for Pounds to Dollars:

S1: 1.6478    R1:  1.6739

S2:  1.6376   R2:  1.6898

S3:  1.6217   R3:  1.700