Euro vs USD - Euro Dollar Daily Candle Chart 6th July 2009

The most important aspect of the daily chart for the euro vs dollar was the candle created last Thursday 2nd July 2009, as Friday’s trading session was distorted by the closure of the US markets for a national holiday.  The key therefore for this week will be whether this bearish engulfing candle is validated or not, and certainly for this morning’s early trading in London, and helped by the comments by ECB President Trichet on Sunday, this may well prove to be the seminal signal in this period of sideways consolidation.   The extent of any possible move to the downside will be determined by the strength of the technical support in various areas of the daily chart as the euro vs dollar begins to move lower, the first of which is rapidly approaching in the 1.3850 region.  If this is breached the next level is at 1.3600 and should this fail then we may looking to a significantly deeper move back to re-test the very strong support in the 1.25-1.30 region.

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