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Pound Dollars Daily Forecast 23rd February 2009

GBP/USD Daily Candle Chart - 23rd February 2009

On the daily chart, Friday’s candle was a wide spread up bar, crossing the 9 day moving average but failing to hold above the 14 day average, but in early trading this morning the upwards price move has continued, crossing both the 9 day and 14 day moving averages. As you can see from the chart I have included the trend lines which are now supporting the formation of a pennant pattern in the daily chart, and it is interesting to note that this morning’s prices have failed to penetrate the upper line, suggesting that a short position trade placed now, might make money this afternoon, and possibly into tomorrow. Whilst I normally advocate caution when trading in a sideways trend, in this case we have a confirming signal of the prices bouncing off a the resistance line, adding some weight to the trade. As always you will need to have your stop loss in place, but I would suggest that this has a reasonable chance of success. We will see tomorrow! There is very little fundamental news today for either the UK pound or the US dollar today.

The short term and medium term is sideways, the long term outlook is bearish.