EUR/USD Daily Candle Chart - 23rd February 2009

EUR/USD Daily Candle Chart - 23rd February 2009

Well – Friday caught everyone out, including me! Having seen the breakout of Tuesday for the euro vs dollar, this was followed on Wednesday by a spinning top, which suggested a small reversal which indeed happened on Thursday (this was as expected as we saw stopping volume in the markets on Wednesday and with a narrow spread it was almost inevitable that prices would rise on Thursday). What was a complete surprise was the price move on Friday with a wide spread up bar on the day, only with the closing price closing above both the 9 day and 14 day moving averages, and once again back into the congestion area above, making today a very difficult call for trading intra day, and if you want my honest opinion, I would stay out. The reason I say that is simply that on the week we have a hammer, which could suggest the first sign of a reversal, but we will have to wait for this to be confirmed next week, whilst on the daily chart we are moving back into a heavy resistance area at 1.2850 and above. So far this morning we have seen prices rise sharply, only to fall back equally quickly, on virtually no news in Europe to speak of – so the pair are behaving in a very strange and volatile way. I would therefore be very cautious about any intra day trades today, and we wait to see what the daily chart looks like tomorrow.