Euro vs Dollar Daily Candle Chart - January 22nd 2009

Euro vs Dollar Daily Candle Chart - January 22nd 2009

The euro vs dollar recovered slightly yesterday with an up bar, moving from lows of 1.2900 and closing the session at 1.2998, with an inside day pattern. However, for any upside potential to be realised it has to hold above 1.3030, but any break below 1.2900 could see a deeper move towards 1.2710. The major news today is centered around the US unemployment claims and building permits which may determine the direction for the remainder of the day, released at 1.30 GMT. The US unemployment figures are the number of individuals who have registered for unemployment insurance for the first time in the past week. Although generally viewed as a lagging indicator the number of unemployed people is an important signal of overall economic health, since consumer spending is highly correlated to labour conditions. Analysts are forecasting 545,000 against 524,000 which in theory should be US dollar negative, so we should see a rise in the Euro. At the same time housing starts( building permits) are also released – a monthly set of figures – reported in an annualised format ( ie the monthly figure x 12), and can be an excellent gauge of future construction activity, because obtaining a permit is one of the first steps needed to construct a new building. The forecast is 0.60 million against a previous of 0.62 million, suggesting a small slowdown.

Finally in trading yesterday, the euro dollar pair was correlating positively with the EUR/GBP at +92, and negatively ( or inversely) with the USD/CHF at -92 and -80 with the GBP/CHF.

If you are trading intra day, a move above 1.3030 should provide a small long trade opportunity.