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Pounds To Dollars - Daily Currency Chart 30 Oct 2009
The pounds to dollars pair ended the week with a relatively narrow spread down candle, which once again dampened speculation that the pair were likely to attempt to break out from this prolonged period of consolidation, and ended the trading session balanced neatly on the 9 day moving average. For Cable bulls this is an encouraging signal following the dramatic fall of the previous week following the truly awful GDP data which triggered to move lower. Technically and fundamentally we are at an interesting juncture, with interest rate decisions in the UK, US and Europe all crammed into a busy week with Non Farm Payroll on Friday rounding off what is likely to be a seminal one for the US dollar. The key of-course will be in the wording of all the various statements accompanying the rate decision itself, since it generally agreed that there will be no changes made to any interest rates this week. However, what may change is the wording of the statements, and in the US in particular given last week’s figures that showed the US emerging from recession and into growth once again. Should this view be supported by the FED and also by the NFP figures on Friday, then the FOMC could signal to the markets that US rates may rise sooner rather than later which in turn could swing market sentiment in favour of the US dollar. Should this be the case, then Cable will sell off sharply and we could see re-test of support in the 1.60 price region once again. Technically this is counterbalanced by the support which came on Friday from the 9 day moving average which suggest that we may see a further attempt to rise once again.
R1: 1.6549 S1: 1.6378
R2: 1.6650 S2: 1.6308
R3: 1.6720 S3: 1.6207
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