The promise shown in yesterday’s weekly candle chart of three white soldiers for the $uros to poundsrency pair has not materialised and we were wise to take a cautious approach as this morning’s price action demonstrates, with a move back through both the 9 and 14 day moving averages.  The failed attempt to clear the 9450 region now looks to be significant and we could be witnessing the start of a prolonged sideways move between 0.8750 and 0.9450 before any concerted move either higher or lower.   With regard to any specific trade recommendation for today we may see some further downward pressure back to retest 91.55.  However, this needs to be seen against the $undamental news this particular pair which includes an important speech by the Governor of the Bank of England, Mervyn King who is due to testify before the House of Lords Economic Affairs Committee.  This is followed 3 hours later by BOE MPC member David Blanchflower who is due to speak at Cardiff University.  The latter’s speech may have a more muted effect as his tenure on the MPC is shortly to expire despite being one of the few economists who has correctly forecast this current crisis.  All the other fundamental data released this morning relating to the euro is covered in detail on the euro to dollar site.

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