Euro vs Dollar Chart 4 Jan 2009

Euro vs Dollar Chart 4 Jan 2009

With the long seasonal holiday now finally over and currency traders finally returning to their desks the thin trading volumes of the past few weeks should now be replaced by some serious numbers which should more accurately reflect market sentiment and provide a more balanced view of the euro dollar.  December was decidedly bearish for the euro as markets worried about a possible default by Greece and coupled with the minor panic in the middle East this combined to send investors into the arms of the US dollar.  Technically the daily chart for the eurodollar still looks weak, despite today’s upbar, and in particular with the 40 day moving average pointing sharply lower.  The key price point for any recovery is now USD1.43 but should this fail and we see a penetration of the USD1.42 level, then this will further reinforce the current bearish picture in the short to medium term and any rally in the euro vs dollar, should be seen as a selling opportunity.

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The fundamental news on the economic calendar for this week is dominated by Friday’s non farm payroll which will be watched even more keenly as the current reversal in the dollar’s fortunes can be traced to last month’s figures.  For today the only item of significance is the ISM manufacturing data which is expected to come in at 54.1, a marginal improvement on the previous number.