Euro vs Dollar - Daily Candl Chart 5th February 2009

Euro vs Dollar - Daily Candl Chart 5th February 2009

Yesterday’s down bar candle continued the sideways consolidation we have seen in the eur vd usd pair for the last few weeks, with no clear signal yet of which way prices are likely to break in the short term. Whilst the candle was a wide body down bar, it failed to be bearish engulfing, but merely served to reinforce two aspects of the current chart. Firstly that the upper trend line remains unbroken for the time being, with a bounce off both the 9 day and 14 day averages, and secondly that the support level in the 1.2800 region still remains intact and acting as support at the moment, preventing any move down. As I am sure you are aware, today is ECB interest rate decision day in Europe, along with the ECB statement due shortly after, at which point we can expect some volatility to enter the market early this afternoon. This is then followed in the US by the Unemployment Claims, and further details can be found on the euro to dollar site.

As there is so much news today, and so little in the way of clear trading signals, my suggestion is to stay out of the pair until later this afternoon, when we may have a better idea with some clearer trading signals.

The short term is sideways, the medium and long term is bearish.