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Euro vs Dollar 8 Sep 2010

euro vs. dollar

Yesterday’s fears of a further European banking crisis appears to have evaporated somewhat today with the euro vs dollar staging  muted recovery after yesterday’s sharp sell off, which ended on the daily chart as a wide spread down bar breaking below all four moving averages in the process once again. As outlined in yesterday’s forex market commentary the recent sideways trend for the euro vs dollar appears to be breaking down with the 40 day average in particular capping the recent attempts to pierce the USD1.2919 price area, before falling back.  The key price level for the next few days to the downside remains USD1.2587 established in late August and provided this is breached then we can expect to see a further sharp sell off in the euro vs dollar in due course with a break below the psychological USD1.25 initially followed by a re-test of the price congestion at USD1.2353 and thereafter a break towards USD1.21.  To the upside any short term attempt to rise is likely to be capped by the 40 day average once again and, in the medium term, we can expect to see its longer term bearish trend with our ultimate target being USD1.18 by the end of the year.