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Euro vs Dollar 22 Sep 2010

euro to dollar

Last night’s FOMC statement in which a further bout of QE2 (quantitative easing) was hinted at, helped to propel the euro vs dollar through the 200 day moving average and also the minor resistance at USD1.3228 to close the forex trading session at USD1.3269 with a wide spread up candle.  This bullish momentum has extended into today’s forex trading session as the pair continue to climb higher and away from this key technical indicator suggesting that the pair are now setting up for an extension of this trend towards USD1.3692 and should this price handle be breached, then even a move back towards the 200 week average which currently sits at US1.3911, cannot be ruled out.  Aside from the FED statement the push higher in the euro vs dollar has also been attributed to successful bond auctions in Ireland and Spain, thereby temporarily dispelling concerns over sovereign debt and possible defaults, but which will probably return at some stage in the future.  The main beneficiary of this current move in the euro to dollar has been gold which has risen to yet another all time high and breaching the $1300 per ounce price point in today’s gold trading session.

The technical picture on the daily chart for the euro vs dollar in the short term has turned firmly bullish with both the 9 and 14 day averages pointing sharply higher, and further weight is added by their crossing of the 40 day average.  In addition the 9 day average is also adding excellent support to the current move higher and with the usd index (latest analysis) now looking heavily bearish, having broken key technical levels at 80 and below, along with the 200 week moving average there is only one way for the euro vs dollar to go for the time being.

With little fundamental news today other than the crude oil inventories in the US later this afternoon, the forex market will continue to digest yesterday’s statement until the unemployment figures come out tomorrow in the US along with the existing home sales, with Friday seeing the German Ifo business index and core durable goods data which may provide a temporary pause (or even a minor pullback) in the current bullish trend.

Faltering risk appetite benefits gold