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Trading Currency – GBP/USD Daily Chart 14th April 2009

Pound Dollar Daily Candle Chart - 14th April 2009

As outlined in last week’s commentary, and despite yesterday’s wide spread up bar achieved on very thin trading volumes, until we see a break above the 1.4925 or even the psychological 1.50 level then I believe the bullish momentum will be difficult to maintain in the medium term.   Whilst the wide spread up bar of yesterday closed above all three moving averages it was achieved with most markets closed for the Easter holidays and therefore from a technical perspective we need to treat this with extreme caution, particularly as the high of the day failed to breach the resistance level outlined above.   A further reason for caution can be seen in today’s price action, which once again has failed so far to clear this price level and is currently forming a spinning top which may well be a precursor to a move lower in the next day or so.  With no fundamental news on the economic calendar for the British Pound all the data today has been in the US where, apart from the Business Inventory numbers, all the other data sets have come in worse than expected.  This has resulted in jittery equity markets and translated into a modicum of dollar strength against the euro.

My trading suggestion for the pounds to dollars pair is to wait until the price clears 1.4974 or better still the 1.5000 price level.  Indeed we may have to wait for a strong weekly close above these prices before any significant bullish momentum can return.

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