Euro vs Dollar Chart 3 Dec 2009

Euro vs Dollar Chart 3 Dec 2009

An interesting day technically for the euro dollar pair, which closed the trading session with a shooting star candle which is now starting to suggest that the bearish sentiment first evidenced by the deep hanging man of last week is beginning to take a hold on the currency pair. This is further confirmed by yesterday’s high which once again failed to breach the 1.5150 price handle, the third time this has occurred in the last 7 days, with the attempt to rise firmly resisted, and thereby creating the text book shooting star candle with the narrow body and deep upper shadow, which is often the portent for a bearish move lower. However, before we rush headlong into a short position, consider this – yesterday’s low found some strong support from the 9 day moving average, which suggests that the bullish sentiment is far from over just yet, and indeed this indicator has provided strong support to this move in the past. Secondly, today is Non Farm Payroll, with all that this entails, and whilst the US dollar index chart remains firmly bearish for the US dollar, the numbers could spring a surprise today. So in summary, we could be seeing the first signs that the euro vs dollar is running out of steam, but until we see a break below the current deep congestion, and certainly well below 1.47 then the outlook remains bullish. This would only be confirmed however if we see a break and hold above the technical 1.5150 price level outlined above, and if so then a move towards 1.52 and then 1.55 would be on the cards.

There is only one major item of fundamental news today for the euro dollar and that is the Non Farm Payroll data which is forecast to come in at -119k, and seen as a slowly improving picture.  However, with the ADP on Wednesday having come in worse than expected anything could happen.  In addition to the NFP data the unemployment rate is also released which at present stands at 10.2% – the worst in 26 years & if this comes in even higher could affect the markets much more than the NFP data.   All in all a volatile day in prospect & one which should produce plenty of short term trading opportunities.

What is one of the best retail forex trading platforms?  In my view it is Metatrader 4.  Advanced, powerful & intuitive it now comes with ECN execution, so you can happily scalp away without broker or dealer intervention.  Just download your free demo copy of MT4 by following this link – download metatrader free –  and get started today.  Don’t forget to follow my daily posts for updates and analysis of the forex markets to help you with your forex trading – so good luck and good trading.

Support & Resistance for Eurodollar :

S1:  1.5019   R1:  1.5123

S2:  1.4975   R2: 1.5183

S3:  1.4915    R3:  1.5227