Euro vs Dollar Chart 15 Dec 2009

Euro vs Dollar Chart 15 Dec 2009

Following yesterday’s quiet day for the euro dollar today has seen a resumption in the strong bearish sentiment with the currency pair falling sharply once again and moving closer towards a re-test of the minor support level at USD1.45 and should this fail then we begin to approach the deep congestion immediately below in the USD1.38-USD1.43 price band.  With the 40 day moving average now crossing the 14 day and with all three moving averages pointing sharply lower this is adding further to the bearish tone which is clearly in the ascendancy at the moment.  However, the recent resurgence in the US dollar may come to an abrupt halt later this week should the tone of the FOMC statement lack any indication of interest rate changes sooner rather than later which have apparently helped to trigger the recent recovery in the US dollar.   Technically we have now breached the strong platform of price congestion created between October and early December and for any return of the bullish momentum we will need to see a break and hold above the USD1.5150 price point which now defines the top of the recent rally.

While the market waits for the FOMC tomorrow in the meantime we have had the TIC long term purchases which came in well below forecast at 20.7bn against a forecast of 38.3bn and a previous of 40.7bn.  Perhaps more interestingly the Empire State Manufacturing Index came in at a disastrous 2.6 against a forecast of 24.7.

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