Euro vs Dollar Chart 3 August 2009

Euro vs Dollar Chart 3 August 2009

There is only one way to trade the euro vs dollar in the short term and that is to buy.  After weeks of dithering Friday’s surge higher which broke above bothteh 9 and 14 day moving averages finally added some much needed momentum to the market which has continued in early trading this morning as we now witness the long awaited breakout at the 1.43 level.  Should this occur today, as expected, then we should look to build profits with longer term trades tracking the move higher with the long period of consolidation of the last 2 months providing a solid platform.  The weekly chart presents a very similar picture to that for the daily chart, with last week’s candle ending the session with a deeper lower wick and bullish body suggesting that a strong move higher is imminent, supported by all three moving averages which are pointing higher.  The monthly chart also reinforces this picture in that the 9 month moving average is now pointing sharply higher and with the other too beginning to turn.  There is very little in the way of resistance ahead, other than that between 1.45 and 1.48 and should these levels be breached then we could see a run back up towards the 1.52 price and beyond in due course.  The only caveat to this picture is the extent to which the ECB will allow the Euro to strengthen to this level once again.  However, given that both the British Pound and the CanadianLoonie have broken through their respective technical levels it really was only a matter of time before the Euro followed suit.

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