Pounds to Dollars Chart 3 Nov 2009

Pounds to Dollars Chart 3 Nov 2009

A confusing technical picture for the pounds to dollars pair, with yesterday’s price action constrained between all three moving averages, as a sell off in the morning session was reversed with strong buying later in the day for Sterling, as the candle ended with a narrow spread up bar, with a deep lower wick to the lower body. The picture for the pair is further confused by the crossing of the 9 and 14 day moving averages, which are signalling a bear cross, but with yesterday’s candle closing on the cross this again is far from clear, and with two days of significant fundamental news now ahead with the FED decision this evening and then Non Farm Payroll on Friday, this is not a time to guess or simply trade on gut instinct. My advice at present is therfore to wait until the end of to week when hopefully a clearer picture will emerge for the pounds to dollars pair where we are once again waiting for a clear break above or below the bounds of the current consolidation range. A break above the 1.67 region will signal a move higher, whilst a move below the 1.60 floor, should signal a move lower. At some point ofcourse we will see strong US dollar buying in the market once again, and this could be signalled by the FED today, should there be any hint that interest rates may rise sooner rather than later and based on the recent ‘good news’ stories of the last few weeks.

The most significant item of fundamental news on the economic calendar for Sterling will be the Services PMI release which is expected at 55.4, marginally better than previous and given the extent to which the British economy is dependent on its service sector a data set which is keenly awaited by traders.  However, the number is released 2 minutes early to Thomson Reuters subscribers so expect some volatile price action at 10.30 GMT.  During the early hours of this morning there were 2 second tier announcements: the first was the Nationawide Consumer Confidence which came in on target at 72 and the BRC Shop Price Index which came in at 0.0%.  Fundamental news for the US is covered on the main eurodollar site.  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.

R1:  1.6497   S1: 1.6302

R2:  1.6575   S2: 1.6184

R3:  1.6692    S3: 1.6107