Euro Dollar - Daily Candle Chart 24th February 2009

Euro Dollar - Daily Candle Chart 24th February 2009

Wow – what a day yesterday on the euro dollar pair! If you made money day trading yesterday, then you did better than I did, although I was fortunate to have some long term short positions which hedged the losses! The price spread was incredible with huge volatility in the market, with a big rise in the morning, followed by a collapse in the afternoon, and I wonder if we are seeing the same thing again today, and as I have said before trading in the euro dollar is becoming a real lottery. This was on a day with virtually no fundamental news whatsoever. The closing price for yesterday was below all three moving averages, having initially penetrated both the 9 and 14 day averages and almost reached the 40 day. This morning we are seeing much the same price action again, with prices moving up fast in the morning, and breaching the 9 and 14 day averages once again. Clearly the breakout of 5 days ago was a false signal and we must now wait for some more signals that this sideways consolidation is exhausted, which is not the case at the moment. My suggestion for today is to stay out, but if you must trade today, I would suggest that opening a short position now at 1.2823 could pay off this afternoon. Make sure you have your stop loss above the high of yesterday.

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