Euro vs Dollar - Daily Forex Chart 27th April 2009

Euro vs Dollar - Daily Forex Chart 27th April 2009

As outlined in last week’s market commentary, we did indeed see the euro vd dollar currency pair squeeze higher from the low at the start of the week, and Friday’s candle continued this trend, closing above all three moving averages, but coming under increasing selling pressure as the day closed. The key for this pair moving forward is the 1.3500 region, and it is interesting to note that in this morning’s early trading we have already seen a reversal in the up move of last week, suggesting that we may be seeing the start of a short term bearish trend of lower highs and lower lows as outlined on the chart with the channel of blue lines. One of the problems at the moment from a technical perspective is the ability to draw meaningful conclusions from the continued convergence of all three moving averages, making any meaningful analysis more difficult, since a move above or below one or other of these technical indicators has less significance than usual, and therefore provides less in the way of weight to our analysis. The weekly chart also provides a similar picture with a rapid convergence of all three moving averages, and little sign that the sideways consolidation is likely to end in the near future, with the prospect of a strong triangle pattern in the chart, should the euro dollar fall once again to re-test the 1.2500 price region.

With the lack of fundamental news being released in Europe and the US today, and indeed nothing now until a speech by ERB president Trichet later this afternoon in New York, then today is probably a day to step aside from trading this currency pair, and to wait for tomorrow and Wednesday when we have slew of data, including the FOMC rate announcement which may help to inject some much needed direction into the pair!

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