Home » Euro vs Dollar Daily Chart » Euro Versus Dollar Trend 20 Nov 2009

Euro Versus Dollar Trend 20 Nov 2009

Euro vs Dollar Chart 19 Nov 2009

The sideways consolidation of the euro dollar continued once again yesterday, with the currency pair trading in a narrow range and adding yet another candle to the strong pennant pattern which is now forming with the point of the pennant in the 1.49 price region. Yesterday’s candle once again confirmed that any breakout from this region is likely to come to the upside, with the move lower earlier in the day promptly reversing  in later trading with the candle ending as a narrow spread down bar but with a deep wick to the lower body, suggesting that the bullish sentiment remains dominant at present. Indeed this analysis is confirmed by the low of the day which found solid support from the 40 day moving average which adds weight to the analysis that the breakout will come to the upside, rather than the downside in due course. The key price level for the break higher remains the 1.5050, and once this has been breached then we should see a move towards our initial target of 1.52 in the short term ( possibly the the end of the year ) followed by a  move towards the 1.55 early next year. This of course presupposes that the FED does not begin an programme of intervention in order to support the ailing US dollar, which is very possible given the statement from FED chairman Ben Bernanke in which he alluded to the weakness of the dollar in a coded speech, which some market analysts  have suggested could indicate a concern over the dollar, and hence a willingness to intervene either directly or indirectly in due course.

With little fundamental news on the economic calendar other than the German PPI figures which came in at 0.0% – marginally below forecast and a speech from ECB President Trichet entitled “After the Crisis” during his attendance at the 19th European Banking Congress in Frankfurt we can expect price action in the euro dollar to be both random & volatile as markets look for direction.

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