Pound vs Dollar - Spot Forex Chart Daily Candles 21st April 2009

Pound vs Dollar - Spot Forex Chart Daily Candles 21st April 2009

With the British Pound being severely punished yesterday as reflected in the wide spread down bar, and with deflationary pressures and the prospect of an appalling budget tomorrow, one can only expect more of the same in the short term for the pounds to dollars pair, with the 1.50 price point now nothing more than a dim and distant memory.  Of more significance is the fact that yesterday’s bar smashed through the secondary support level at 1.46 and in addition broke the sequence of higher highs and higher lows which are indicative of a bullish trend, suggesting that this has now halted and reversed.  This has been confirmed in this morning’s early trading with the high of the day failing to hold or penetrate above the 1.46 region and my suggestion therefore for the remainder of the day is try to find short positions on an intra day basis whilst waiting for the longer term pattern to re-establish itself.

There have been a number of important fundamental news items on the economic calendar this morning for the British Pound, not least the confirmation that deflation has now taken hold in the UK with the release of the RPI figures which although coming in at -0.4% against a target of -0.6%, marginally better than expected, it  is the first time in five decades that this has occured.  The CPI data released at the same time came in on target at 2.9%.  This afternoon sees attention switch to the US where Treasury Sec Geithner is due to testify to the Congressional Oversight Panel in Washington, and will no doubt bring some volatility to the market.

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.