Euro vs Dollar - Daily Candlestick Chart 30th March 2009

Euro vs Dollar - Daily Candlestick Chart 30th March 2009

Friday’s wide spread down bar added significant momentum to the reversal signal that we first saw last Monday with the long legged doji, and closed the week just above the 14 day moving average.  The spread of the day has rebalanced the moving averages which had been out of kilter since the wide spread up bar of 2 weeks ago and we should not be able to make more confident technical trading decisions now that this anomaly has been offset by an equal move in the opposite direction.   In addition the euro vs dollar is now back in inverse correlation with the dollar Swiss, a relationship that had fallen out of its traditional relationship since the intervention by the Swiss National Bank to weaken the currency.  So in simple terms as one pairs falls the other will rise and visa versa.

The bearish tone has continued in early trading with prices now well below the 14 day moving average and the next significant target is whether the support level at 1.3085 will hold or provide a platform for re basing.  With a lack of any meaningful fundamental news on the economic calendar today (other than Trichet speaking this afternoon – see euro to dollar site for more details) we may have to look to the US stock markets for guidance as to euro vs dollar direction.  Market opinion is divided as to whether the recent Dow rally is nothing more than a dead cat bounce in which case we could see further dollar strength with the euro vs dollar falling as a result.

My trading suggestion for today is to move your stop loss lower in existing short positions to lock in any profits, and for intra day trading look to sell into the market on any up bars in the shorter time frame charts such as the 15 or 30 min charts.  I would suggest you place any stop loss for these trades above the open of the morning session.  Also just be aware that this week is likely to be unpredictable against the backdrop of the G20, a host of fundamental news later in the week and the unscheduled and unprompted comments and speeches from an array of financial luminaries and government leaders all topped off with the Non Farm Payroll figures on Friday.

In the meantime you can keep up to date with the latest live currency charts and latest currency news by simply following the relevant links, and if you are looking for a good ECN broker or fx broker who also provide excellent volume indicators, then just follow the link.