Euro vs Dollar Currency Chart - 21st September 2009

Euro vs Dollar Currency Chart - 21st September 2009

Forex Technical Analysis

The euro vs dollar continued to march ever higher last week, with the only temporary setback coming on Friday, with the last trading day of the week ending with a narrow spread down candle, but one with a deep and significant lower wick to the body, and with the low of the trading session finding support from the 9 day moving average. With all three moving averages pointing sharply higher, and with the US dollar continuing its steep and deep decline, there is nothing to suggest that the current rally in the euro vs dollar is likely to end soon, or is there?

First, it is interesting to note from the daily currency chart, that over the last ten days, the spread of each candle has been narrowing each day, and certainly since the breakout of two weeks ago, all of the subsequent candles , whilst blue and positive, have remained in a tight range during each trading session, and have not exhibited any surge in momentum which we would have expected. Thursday’s candle in particular was very narrow, and followed by Friday’s weakness. Whilst it may be premature to forecast a reversal lower for the euro vs dollar, we are now running into some dense resistance in the 1.47 to 1.50 price region, and indeed the previous rally of late 2008, failed at the 1.4710 with a subsequent steep sell off back to 1.25. This seems unlikely at present, but we may see some volatility later in the week, sparked by the FOMC rate decision and statement due out on Wednesday, and I have covered all the forex fundamental news for the euro vs dollar on the euro to dollar site.

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