The recent bullish tone on the $uros to poundsr came to an sudden halt yesterday, with a wide spread down bar which broke below the 40 day moving average, but which did find some support from the 9 day moving average, and contrasted with the previous day where prices had broken above the 40 day moving average.  However, the support from the lower averages would seem to suggest that this is only a temporary reversal and indeed in today’s trading this view would seem to be confirmed with the today’s candle creating a hammer pattern suggesting the bulls are taking control once again and pushing prices higher.  All this price activity is taking place in a relatively narrow trading range and until we see a sustained break above the 87 handle and an approach to the 88 resistance level it will very difficult to trade this upswing with any degree of confidence.  For any sustained move higher we will need to see a break and hold above the 0.90 price level, coupled with strong support from all three moving averages.

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