Euro vs Dollar Chart 7 Dec 2009

Euro vs Dollar Chart 7 Dec 2009

The sharp sell off in the euro  dollar on Friday failed to follow through into Monday’s trading session with the currency pair ending with a hammer candle and a deep lower wick, suggesting that any bearish sentiment has now been absorbed by the euro bulls, and as such we can expect to see a bounce higher in the pair in the short term in due course. However, whilst prices remain below all three moving averages, this will not be confirmed until we see a break and hold above all three once again, and any reversal may only be short lived as with considerable resistance now above, this may present a solid barrier to a move back higher to retest the 1.5150 price level once again. So in summary, in the short term we may see a move higher today as a result of the hammer candle of yesterday, but for the longer term we need to see the moving averages breached once again for a resumption of the longer term bullish trend to be reestablished.

With little news for Europe today, other than the French Govt Budget Balance & German Industrial Production, and some countries closed for a Bank Holiday price action could be desultory for this pair & it may be better to look at the Yen pairs which have provided some excellent trading opportunities.    There is a similar lack of fundamental news in the US where there is only one scheduled for this afternoon:  the IBD/TIPP Economic Optimism data – a diffusion index based on a survey of 900 consumers.  The forecast figures if for 49.5, up a previous of 47.9.

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Support & Resistance for Euro Dollar :

S1:  1.4762    R1:  1.4910

S2:  1.4685    R2:  1.4981

S3:  1.4614    R3:  1.5058