Pound to Dollar
Posted on February 11, 2008
Filed Under GBP/USD |
Back to using this blog for currency related matters as there is so much going on in other markets.
Cable , ie the pound dollar, has taken a hammering since last November’s multi-year peak. However, there is now a potential for a double bottom at the 1.94 (1.9335 was the low for this year) area with only a close above 1.96 preventing any further downside probing.
Market sentiment is showing a consensus for the pound dollar to drop steadily against both the dollar and the euro. I have always maintained that the dramatic change in fortunes for the pound has been more to do with the UK government’s handling of Northern Rock together with interest rate cuts in response to the dramatic slowdown in the UK economy rather than a positive desire for US dollars.
Possible trades for cable include longs at 1.9450 with a stop below 1.9300 adding to anything above 1.9650 for a possible run to 1.9800 in the short term. However, do not expect any dramatic moves this week as the market seems to be in a wait and see mood. Even the G7 summit has failed to add anything new to the market.
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