Home » Euro vs Dollar Daily Chart » Daily Candle Chart – EUR/USD 19th February 2009

Daily Candle Chart – EUR/USD 19th February 2009

Euro vs Dollar - 18th February 2009 Daily Candle Chart

Euro vs Dollar – 18th February 2009 Daily Candle Chart

Yesterday’s price action was disappointing, but not entirely surprising following such a wide spread down bar on the previous day, and last night left us with a spinning top doji candle, with a very narrow spread. For those of you trading with brokers who provide live tick volumes, then you would have seen a similar volume on both days which suggests that yesterday was stopping volume, in other words we can expect the down trend to halt temporarily. Given the doji candle, combined with excessive tick volume, then I would expect to see prices rise this morning in early trading, but as always we need to consider the fundamental news due out later in the US, which I have covered for you in detail on the euro to dollar site. Now before you all write in saying that it is impossible to apply volume spread analysis techniques to the forex market – I would agree – however, the tick volume provides another view of the market, and as a trader I use it as an additional signal when analyzing the candlestick on the chart. Many brokers do not provide this as a standard option, and if you would like details of the one I use then please just leave a comment on the blog, or alternatively drop me a line at the ask Anna site which can be found in the left hand sidebar.

So, in summary, whilst the trend is still bearish in the longer term, if you are trading intra day today, then I would suggest small long positions this morning with tight stops and only look for a few pips profit on each trade, and then wait for the news this afternoon in the US. The major consideration for the next period is the heavy support area that we are now entering, and in effect the euro dollar have now entered a ‘tunnel’, with resistance immediately above, and support and congestion directly below over a 500 pip range. For a sustained bearish move we will need to see this support level breached, and is so ( as I have said before) expect a move lower to 1.22 and below.

The short term outlook is sideways, the medium to long term is bearish.