Pounds to Dollars 26 Oct 2009

Pounds to Dollars 26 Oct 2009

Following the knockout blow from the GDP figures last week, the pounds to dollars pair valiantly tried to recover some composure and lost ground yesterday, as it struggled to move higher, but ended the session with a weak candle only marginally higher on the day and with a deep shadow to the upper body. This weakness was further confirmed by the high of the day which found strong resistance from the 9 day moving average, suggesting that any recovery may be short lived and that the weight of Friday’s data may linger for some time to come. With the 1.67 upper resistance level now firmly re-established once again, the conslidation channel of the last few months has now been firmly reinforced once again, and for any move higher ( which now seems increasingly unlikley ) we will need to see a break and hold above this level. What seems more likley given the technical picture and bearish engulfing candle of last week, is that we will see a break lower in due course, a view reinforced by the crossing of the 40 and 14 day moving averages.The only item of fundamental news on the economic calendar for Sterling will the CBI Realized Sales Data due at 12.00 noon which are expected to come in at 6.  Any number above zero indicates higher sales volumes and this data is considered a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels.  The forecast number is double the previous and should it come in worse than expected we could see some intense volatility in the pounds to dollars pair.  I have covered all the news for the US on my main eurodollar site.

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