Pounds to Dollars Chart 23 Oct 2009

Pounds to Dollars Chart 23 Oct 2009

The pounds to dollars pair was dealt a savage blow on Friday with the release of the GDP figures for the UK, which confounded the market by coming in at -0.4% against a forecast of 0.2%, suggesting that the UK remains mired in recession despite Gordon Brown’s protestations to the contrary!  Indeed the figures were so awful that the Bank of England may well have to reconsider its policy and as a result may soon be considering a further massive increase in i’s bond purchasing program, which now stands at a  mind boggling £175 billion as the Bank pumps yet further funds into an economy which has long since disappeared beneath the waves!  From a technical perspective, Friday’s wide spread down candle brought the recent rally for Cable to a shuddering halt, with the dramatic fall breaking below the 9 day moving average, and ensuring a negative end to the week overall, with 1.67 once again proving to be the Achilles heel for the currency pair. Given the strength of the move lower, and the dire nature of the fundamental news, it would be a surprise if thi bearish engulfing signal was not duly confirmed in trading this week, and as a result we should see a consequent move lower in the pounds to dollars pair, possibly to re-test the support level at the 1.61 price region in due course.

With no items of fundamental news on the economic calendar for either the UK (apart from a speech from BOE MPC Member Designate Adam Posen to the Cass Business School) or the US expect prices to drift as markets look for some direction.  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.