Euro Dollar Daily Chart - 25th February 2009

Euro Dollar Daily Chart - 25th February 2009

Trading the euro vs dollar at the moment is a complete lottery. I managed to take some profit yesterday, but only just and I do not propose to trade the pair until the current sideways action and random moves have calmed. As I have mentioned on the fundamentals post this morning on the euro to dollar site, many currencies are moving in an almost random fashion, with no correlation either to each other or to related markets, with statements from Bernanke not helping the situation.

Yesterday’s candle was a wide spread up bar which crossed both the 9 day and 14 day moving averages, and back into the congestion area once again. Whilst this could be considered a bullish engulfing signal, I would suggest you do not trade on this signal and stay out of this pair until further notice. The candle actually hides a multitude of sins with three significant moves, moving up in early trading, then falling back, before moving back up again on the statement from Bernanke last night. So my advice is to stay out and to look for opportunities elsewhere. I am currently trading the dollar yen which is providing a nice rally at the moment after a breakout from consolidation, very similar to the euro dollar – so as always you have to be patient in this game!

The short term and medium term is sideways, the long term outlook is bearish.