Euro USD - Daily Candle Chart 23rd March 2009

Euro USD - Daily Candle Chart 23rd March 2009

The weekly chart for the euro vs dollar pair simply confirms what we already knew, namely a wide spread up bar which broke out of the sideways consolidation of the last few weeks and finished well above both the 9 and 14 week moving averages.  The conundrum for traders in the next period is whether the technical view will hold sway or whether the fundamental news of quantitative easing will converge into further dollar weakness with both suggesting further dollar weakness to come.   Whether the two views will remain synchronized over the longer term remains to be seen.  From a technical point of view for the move to continue we now need to see a sustained break above the 40 week moving average with the next area of resistance around the 1.394 region and if this is penetrated then we could see a move back to retest the 1.43 to 1.45 area.

This morning’s session has been particularly desultory as the market waits for Treasury Secretary’s Geithner’s to speak in the US when the issue of toxic assets will, once again, be on fundamental news agenda.   My suggestion for today is to wait for any reaction to this speech given that tomorrow is a very busy day for fundamental news in the economic calendar.  Once we see the close on today’s daily chart we may be able to open positions tomorrow based on this analysis.

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