Forex Analysis for Euro vs Dollar 26 Aug 2009

Forex Technical Analysis

Once again the euro vs dollar promised much but delivered little in yesterday’s forex analysis, with the threatened breakout in early trading failing to materialise, and the currency pair falling back later in the session to end the day with a weak shooting star candle formation.  With a small body and deep upper wick, the candle suggests a bearish tone to today’s trading in the euro vs dollar, as the pair once again consolidates in this congested area immediately above all three moving averages. Like many other markets , the currency markets too is suffering from thin trading volumes, lack of any real news, and summer holidays in full swing, are all adding to the sideways movements of  which the euro vs dollar is no exception. Until we see a break out above the new resistance level at 1.44, then we can assume that the pair will continue to trade in this range until normal market volumes return in September. The only way to trade at present is on an intra day basis aiming at small profit targets.

Fundamental Forex Analysis

This morning’s fundamental news on the economic calendar started early with the release of the German Import prices data which came in worse than expected at -0.9% against a forecast of -0.7%, a relatively minor piece of news, but one which is followed by the more significant German IFO Business Climate data, a number which will certainly have an impact when released. The forecast for today is 89.1 against a previous of 87.3. The IFO data is highly regarded due to it’s large sample size and historic correlation with German and wider Eurozone economic conditions, and as a result tends to have a significant impact on the forex market when released, as it generally considered a leading indicator of the economy in Europe. The figures are derived from a  survey of about 7,000 businesses which asks respondents to rate the relative level of current business conditions and expectations for the next 6 months.

The focus of attention for forex traders then shifts to the US where we have two key numbers this afternoon, namely Core Durable Goods ( and Durable Goods which is less significant) followed 90 minutes later by New Home Sales. The first of these is expected to come in worse than last time at 1.0% against a previous of  1.6%, whilst new home sales are expected to show a modest improvement from 384,000 to 393,000. Both numbers will provide some interesting  fundamental forex analysis for forex traders and analysts. Shortly after this we have the Crude Oil Inventories, but as always these will tend to have more of an impact on the Canadian Dollar owing to Canada’s pre-eminence in the energy complex, and these numbers will be available on the crude oil trading site soon as they are available. The usd to cad par will no doubt react to these figures on release which are forecast at -2.1M  a huge change from last week’s -8.4M.

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.