Euro Dollar - Daily FX Chart 11th May 2009

Euro Dollar - Daily FX Chart 11th May 2009

Friday’s wide spread up-bar closed the week for the eurodollar on a strong bullish tone, surging 250 pips on the day closing just below the 1.3650 region, on the back of US dollar weakness and rising equity markets, a pattern that now seems set to continue for some time, particularly when viewed in the dollar index chart.  With all three moving averages now providing strong support it seems increasingly likely that we are currently witnessing a major breakout for the euro to dollar and provided we see a break above the current resistance level created in mid March at the 1.3657 level, then we can expect to see the euro dollar re-test the 1.4 region with a possible back to 1.47 in the longer term.   With very little in the way of resistance ahead this now seems almost inevitable.

My trading suggestion for today is to look for buying opportunities intra-day, particularly as we are seeing the euro dollar fall this morning on profit taking and weaker fundamental news in Europe from Italy and France.  If we should see the break outlined above then look to build on these positions for longer term trend trading in the medium term.

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