Forex Analysis Pounds to Dollars 1 Sep 2009

Forex Technical Analysis

It is hard to see how the pounds to dollars pair is going to recover from the technically bearish  position in the short term, with all three moving averages now pressing heavily on Sterling , and coupled with the strong support which has now effectively been breached in the last few days, any recovery higher will require a sustained effort and a large dose of US dollar weakness. Yesterday’s candle ended the forex trading session as a small doji, with the low of the day finding some support in the 1.62 price region, in much the same way as towards the end of last week, suggesting that the forex market is trying to rebase at this level. However as outlined above any attempt to move higher will need to breach all three moving averages as well as break and hold above the deep consolidation area, both of which seem unlikely at present. More likely is a re-test of the 1.60 price handle in the short to medium term, which may provide a stronger platform for any reversal higher once again. However, should this level be breached then a deeper move to 1.55 or below would be a possibility in the medium term.

Fundamental Forex Analysis

As we start a new month of fundamental news for Cable, the key data this morning will be the Manufacturing PMI number which is forecast to remain above the ’50′ level, at 51.5 against a previous of 50.8, suggesting once again that we are seeing an industry in expansion rather than one in contraction. As a leading indicator it is one that the forex markets will watch closely, and indeed this picture is likely to replicated later in the US where we have the equivalent data in the afternoon for the US economy, which also shows a similar picture. The other main item of fundamental news in the UK are the Mortgage Approvals, which are expected to show a very small increase once again.  All the other items of news are covered in more detail on the euro vs dollar site or on the economic calendar by following the appropriate link.

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.

Forex Market Analysis - Daily Chart GBP/USD 31st August 2009

Forex Technical Analysis

Friday’s candle once again left the daily forex chart for Cable looking weak, ending the forex trading session with a narrow spread down bar, but deep upper shadow as the US dollar bulls forced the British Pound lower in later trading.  The weakness is reinforced by the fact that the high of the day failed to break above any of the three moving averages, which are now adding to the bearish pressure from above. In addition, as the pair have almost breached the deep support level, and seem about to break out below the lower level, this is adding the the general technical weakness on the daily chart. The key for any deeper move is of course the 1.600 price handle and should this be broken in due course, then we may see a re-test of the 1.57 level as a result. The weekly chart also confirms this view with the shooting star candle sitting neatly above the recent price falls, and with last weeks closing price ending below both the 9 week and 14 week moving averages, this again is confirming our forex technical analysis for the pounds to dollars pair.

Fundamental Forex Analysis

Monday is of course a national holiday in the UK, so there is no fundamental news on the economic calendar for today for the British Pound, with the only data in the US being the Chicago PMI, which is expected to confirm that we may now be reaching the end of the recession and bottoming out into the long slow and no doubt painful recovery.

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.