Euro vs Dollar Monthly Chart - 2nd February 2009

Euro vs Dollar Monthly Chart - 2nd February 2009

Contrary to the weekly candle chart for the euro vs dollar, the monthly chart has given us a two bar reversal, not quite bearish engulfing, but close, with the pair closing 1200 pips lower on the month. More significantly the close is now well below all the moving averages adding weight to the move. However a word of caution, as in the last four months we have seen extreme volatility in the market, with abnormal price spreads in the monthly periods, which make trading on the long term time frame extremely difficult at the moment as there is no established pattern or trend to the currency pair. My suggestion for long term trading would therefore be to stay out of the euro vs dollar as a long term trade, and use the weekly and daily signals for short term trading, and wait for a more orderly trend to be established before opening long term positions.