Euro vs Dollar 7 Oct 2009

Euro vs Dollar 7 Oct 2009

Trading on the euro vs dollar was muted yesterday to say the least as the markets moved sideways ahead of the ECB interest rate decision today, although quite why is a mystery to me as rates are unlikely to change in the short term, and therefore today’s decision is somewhat of a non event., although some analysts expect Jean Claude Trichet to comment on the current parlous state of the US Dollar.   Hardly earth shattering but no doubt the markets may react in their usual knee jerk reaction.    Technically the euro vs dollar chart remains bullish with yesterday’s candle closing above all three moving averages and the low of the day finding some support from the 14 day moving average, but for any sustained move we now need to see a break and hold above the 1.48 price level, which is the next key level for a move towards our initial 1.50 target for the euro vs dollar pair in the short term. Given yesterday’s price action, the ECB ‘decsision’ may provide further support for the euro and push us closer to the resistance level immediately ahead.   Other than the interest rate decision and statement there have been a number of other fundamental items of news on today’s economic calendar already for Europe.

The morning started with the French Trade Balance numbers which came in worse than expected at -3.4bn against a forecast of -2.4bn.  Next German Industrial Production figures were reported and these too came in slightly worse than expected at 1.7% against a forecast of 1.9%.  Once the market has absorbed the ECB decision the focus shifts to the US where the unemployment claims are due.  This is a measure of the number of individuals who filed for unemployment insurance for the first time during the past week and the headline number is for 543k, a small drop from the previous week.  Although considered a lagging indicator the number of unemployed is an important signal of the overall health of an economy given the extent to which consumer spending is correlated to the labour market.  Taken in conjunction with the efforts that the US consumer is making to pay off his or her debts this number will be highly significant.  The fear of mass unemployment is not what a recovering economy needs.  Later we have the Wholesale Inventories data which is forecast at -0.9% and this measures the total value of goods held in inventory by wholesalers and is an interesting number as it is seen as a signal of future business spending.  Next we have the natural gas storage numbers and finally speeches from two members of the FOMC, Jeffrey Lacker and Daniel Tarullo.  Jeffrey Lacker is due to speak about economic education to the Council for Economic Education’s annual conference in Washington while Daniel Tarullo will be in Phoenix giving a speech entitled “In the wake of the Crisis” – indeed!

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.