Euro vs Dollar Chart 23 March 2010

The euro vs dollar continues to remain extremely bearish as we once again probe the USD1.3450 price area which is now critical for any further support at the current level.  Yesterday’s minor rally on a day of no news lacked conviction and even failed to test any of the short term moving averages immediately above.  Should we see a breach of USD1.34 in the next day of so then expect to see the eurodollar move lower rapidly, initially to re-test in the USD1.30 area with a much deeper move to USD1.25 also likely in the longer term.  Any move higher in the short term is likely to be restricted to a short squeeze and will therefore provide further opportunities for opening trading positions to the short side as the downwards trend continues.

The only significant item of fundamental news for the eurodollar is in the US later today with the existing home sales figures which are expected to come in at 5.01m, marginally lower than the last time.   Should the numbers come in better than expected then this would be considered positive for the US dollar.

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Eurodollar News :

Greece accuses Germany of “squalid game”

China key to Dollar Fate