Today's Exchange Rate Trade: Sell the Pound Dollar says the Forecaster

The pound dollar exchange rate is today trading virtually unchanged on last night's closing rate. The rate is quoted at 1.6528 in mid-morning in London.

There is a distinct lack of enthusiasm for the UK unit, as highlighted by today's coverage, but how does this translate into trading opportunities.

Analysts at FuturesTechs are forecasting further declines in Cable, and have issued the following trade idea which mirror's Tuesday's call:

  • Short Term Trend: Bearish
  • Medium Trend: Bullish
  • Candlestick Chart says: A small recovery yesterday but nothing to get excited about and probably a selling opportunity. Once 1.6460-71 is taken out we can look for further downside.
  • Profile Charts says: Support might show up at 1.6497.
  • Summary: Yesterday’s recovery/rally was unconvincing.
  • Trade Idea: Sell below 1.6526, stop above 1.6552, targets 1.6475 then 1.6375. Medium conviction “Keeper”. Time Stamp: 7.20amOpen1.6499High1.6551Low1.6481Close1.6529Change

The US dollar today

The USD managed a modest recovery against the EUR and CHF yesterday, but the move was based more on the EUR than the USD, which was generally little changed against the other G10 currencies.

Today sees durable goods orders numbers, which are traditionally volatile and have been choppy in recent months.

"It seems unlikely these will be strong or weak enough to trigger a major USD move today, and while the USD seems well underpinned for now by the market’s recently more hawkish view of the Fed, it is hard to make a case for significant USD strength from here without something more clear-cut from the data," say Lloyds Bank Research.

According to the latest economic reports, consumer confidence hit a 6-year high in March.  

After a harsh winter, it appears that the promise of spring boosted the moods of consumers, which will hopefully translate into stronger demand.   

The Conference Board's consumer confidence index rose from 78.3 to 82.3, exceeding the forecast of every economist surveyed by Bloomberg.

Stronger job growth combined with increased activity in the housing market drove the gains and as incomes continue to grow, we could see a further improvement in sentiment. House prices also rose 0.85% in the month of January according to S&P CaseShiller.

Despite the strength of yesterday's economic reports support for the USD was hard to come by.

Thus, we will keep an eye on technical levels for direction today.