Euro vs Dollar 12 Oct 2009

Euro vs Dollar 12 Oct 2009

Once again the euro vs dollar struggled to breach the 1.48 price handle which seems to be creating a degree of resistance to the bullish trend as the markets failed to take advantage of the lack of flow and fundamental news owing to the closure of the US markets for the Columbus Day national holiday. The euro vs dollar trading session ended the day as a narrow up candle with shadows to both top and bottom.  However, the  key point to note once again is that the low of the day found support from both the 9 and 14 day moving averages suggesting once again that the bullish sentiment remains firmly in place, a view which will be confirmed once we see a break and hold above the 1.4850 price handle where the previous rally stalled.

The fundamental news on the economic calendar started in Europe with the French CPI numbers which came in at -0.2%, below the forecast of -0.1%, the fifth straight month that French consumer prices have fallen.  The markets then wait for the German ZEW Economic Sentiment Index and European ZEW Economic Sentiment Indices which are both expected to come in better than expected at 58.6 and 61.3 respectively.  The German ZEW is considered the more important of the two given the strength and depth of the German economy.  Traders focus on this number as the index is considered a leading indicator of economic health as the investors and analysts which make up the index are considered to be highly informed and changes in their sentiment can be an early signal of future economic activity.  A better than expected figure is usually positive for the currency in question.   Eurodollar traders then shift their focus to the US where we have a number of second tier items of fundamental news; the first is the IBD/TIPP Economic Optimism index based on a survey of consumers.  The survey is based on 900 consumers and asks respondents to rate the relative level of economic conditions including a six month economic outlook, personal finance outlook and confidence in federal economic policies.  The forecast figure is 53.1 (anything over 50 is considered positive), up from 52.5.   Later in the day FOMC Member William Dudley is due to speak at the Institute of International Bankers Membership Lunch in New York and audience questions are expected.  This is followed by another FOMC member, Donald Kohn who is also delivering a speech to the National Association of Business Economists Annual Meeting in St Louis and again questions are expected.  The final item of news from the news (release time is tentative) is the Federal Budget Balance which confirms the difference in value between the federal government’s income and spending during the previous month and the forecast is for -43.3bn and it will be interesting to see the rate and scale of current federal spending.

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.