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Euro vs Dollar 28 Sep 2010

euro vs dollar

The euro vs dollar has continued in much the same vein as last week, moving higher once again adding further momentum to the current bullish trend as it trades at time of writing USD1.3543.  This break higher was initiated on last Tuesday with the wide spread up candle which breached two key technical levels, the first of which was resistance at USD1.3250 coupled with a break and hold above the 200 day moving average on the daily chart.  This upwards momentum has been given a further boost today by the 9 day average crossing above the 200 day giving us a strong bull cross signal.  In addition the 14 day average too is pointing sharply higher and with the 200 day now breached, the momentum for the trend higher is gathering pace.  From a fundamental perspective the release of today’s CB consumer confidence index in the US also helped to give the pair a further leg up with the data coming in worse than expected at a disappointing 48.5 against a forecast of 52.5, suggesting once again that the US economy is faltering at this critical stage in any recovery cycle.  To add further to the woes for the US dollar the FED has once again indicated its intention to step in with further bout of quantitative easing, should the need arise.  The short term outlook for the euro vs dollar remains bullish with the next key level of resistance now awaiting at USD.3817 and should this fail to hold we can expect to see the move develop further with a test of the 200 week moving average which currently sits at USD1.3912 in due course.

Hostilities escalate to hidden currency war