Euro vs Dollar Chart 26 Oct 2009

Euro vs. Dollar Chart 26 Oct 2009

The USD1.50 price level is proving to be a tricky obstacle for the euro vs dollar, with yesterday’s sharp sell off in the afternoon, reinforcing this point once again, with the currency pair ending the trading session with a wide spread down candle, which breached both the 9 day and 14 day moving averages. In addition the short term bearish flavour of the daily chart, is further evidenced by the tweezer top now in place following Friday and Monday’s failed attempts to breach this level, and suggesting that we may see a further fall in the next few days, before the upwards rally continues in due course and on towards our initial target of 1.55 for the euro vs dollar pair. With strong support now firmly in place below, and with the 40 day moving average adding further support, the bullish rally for the pair will no doubt continue in due course, and once the minor resistance at 1.50 has been breached, then our medium term target of 1.55 should be achieved in due course, helped of course by the continued US dollar weakness which has now become a ‘de facto’ standard for our currency trading at present.

We have a number of items of fundamental news on the economic calendar for both the Euro and the Dollar.  The releases start with the M3 Money Supply for Europe which is forecast to come in at 2.1% and this data is positively correlated with interest rates as early in the economic cycle an increasing supply of money leads to additional spending and investment and later in the cycle expanding money supply leads to inflation.  Interestingly the forecast number is lower than previous. The second item is the Private Loans figures which measures the change in the total value of new loans issued to consumers and businesses in the private sector. The forecast is -0.2% which is lower than previous. Of the news releases due out in the US the most important is the CB Consumer Confidence index based on a survey of around 5000 households and asks respondents to rate the relative level of current and future economic conditions.  The forecast figure is 53.7, a slight increase from the previous 53.1.  Currency traders care about this number as financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity.   Either side of this release we also have two tier 2 items: first is the S&P/CS Composite which measures the change in the selling price of single family homes in 20 metropolitan areas and should give the markets and indication of whether the US housing market has finally stablised. The forecast is for -11.9% against a previous of -13.3% – which if achieved would show the market to be stablizing.  The final item is the Richmond Manufacturing Index which is expected to remain the same at 14.

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.