Euro vs Dollar Chart 16 Nov 2009

Euro vs Dollar Chart 16 Nov 2009

The euro dollar continues to oscillate in the current price range, with another day of sideways price action yesterday, which ended with a long legged doji candle, signifying indecision in the market – hardly a positive signal that the 1.505 top is likely to be breached in the short term. Indeed the high of the day seemed to struggle at the 1.50 price handle once again, adding another level of potential resistance into an already crowded arena. However, this analysis must be counterbalanced by the fact that prices are still sitting above all three moving averages for the time being, and this remains a positive factor, with the low of yesterday finding support from the 14 day moving average. So in summary the technical picture for the euro vs dollar remains unchanged from the last few days, with only a break and hold above the 1.5050 price level indicating that the bullish trend remains intact, and a fall below the 1.47 coupled with a breach of the moving averages suggesting the reverse.

The main item of fundamental news this morning for the Euro was the release of the trade balance figures which came in much better than expected at 6.8bn against a forecast of -0.9 confirming that the biggest rise in 20 months for European exports.  Meanwhile in the US the two most important items this afternoon will be the PPI numbers and the TIC data.  PPI which measures the change in the price of finished goods and services sold by producers is forecast to come in at 0.6% and traders care about this release as it is leading indicator of consumer inflation.  The TIC data will also be closely watched as it measures the level of foreign investment and demand for US dollars.  Given the ongoing rhetoric about the US Dollar (from all quarters) this is one of the few data sets which guages market demand for the US Dollar.

Support & Resistance for the Euro Dollar

S1:  1.4903     R1:  1.5038

S2: 1.4824      R2:  1.5094

S3:  1.4768    R3:  1.5173

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