euro vs. dollar

Euro vs Dollar 7 Sep 2010

The recent short term squeeze for the euro vs dollar appears to have run out of steam earlier than expected, with the 40 day moving average proving to be the catalyst for this reversal.  Friday’s close signalled resistance at this level which was confirmed on Monday with the euro vs dollar once again failing to breach this key technical indicator.  Today’s move lower has pushed the pair back below the psychological the USD1.27 level to trade at USD1.2697 at time of writing, simultaneously breaching both the 9 and 14 day moving averages as a result.  For this downwards move to be confirmed we need to see a clear break below USD1.2587 in the next few days and, should this occur, then we can expect to see a resumption of the longer term bear trend with a re-test of USD1.2416, the next logical target.  Thereafter USD1.2151 becomes increasingly likely with a final deeper thrust towards USD1.1876 in the next few weeks.  The 200 day moving average continues to apply firm pressure to this down move and, as such, expect to see the downwards picture established in the run towards the end of the year.

Much of today’s negative sentiment towards the euro vs dollar has been attributed to problems in the German banking system and a drop in German factory orders which has sent market participants back into the safe haven arms of the Swiss Franc, Treasuries, Japanese Yen and gold.

Eurozone fears sends investors into havens