Euro vs. Dollar 4 Nov 2009

Euro vs. Dollar 4 Nov 2009

Following on from Tuesday’s hammer candle. and the apparent pricing platform created at the 1.47 price level, yesterday’s wide spread up candle confirmed this analysis, with the euro vs dollar pair breaking higher once again and closing marginally below 14 day moving average, but above both the 9 day and 40 day averages.  It is interesting to note, however, that the close of the trading session seemed to meet some resistance from the 14 day average, late in the day, suggesting perhaps that this move higher may be short lived, but as outlined in yesterday’s market analysis for the euro vs dollar pair technically we are now in a very tricky area, and the picture still remains somewhat confused despite yesterday’s strong perfomance.  In simple terms the price action is now sandwiched between a solid platform at 1.47, and the recent top at 1.5050, and these two price levels will now define the future movement in the short term for the pair. Given yesterday’s move higher, and coupled with the base below we could see an attempt to breach the upper level in due course, with a consequent move towards the 1.55 price level towards the end of the year. However, in the short term this analysis must be counterbalanced by the apparent resistance from the 14 day moving average, which could act as a barrier to the move, with the pair moving lower once again to retest the support at 1.47 in due course once again. On balance, and given the reaction to last night’s FED statement, my feeling is that we will see the pair continue to rise in due course and break above the 1.50 price handle as a result.

R1:  1.4949    S1:  1.4742

R2:  1.5033    S2:  1.4619

R3:  1.5156     S3:  1.4535

Today’s fundamental news on the economic calendar is, of course, dominated in Europe by the ECB rate decision and subsequent statement and any hint of an early rise can only boost the Euro yet further  – despite FED signalling yesterday that they too are now watching the inflation environment.  This afternoon then sees the unemployment claims in the US which measures the nu7mber of individuals filing for unemployment insurance for the first time during the past week and the number expected is 523k, marginally less than previous.  It is a sobering thought that since this recession started in 2007 the unemployment rate in the US has doubled and the jobless total has risen from 7.6m to 15.1m.  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