Euro vs Dollar - Daily FX Chart 1st May 2009

Euro vs Dollar - Daily FX Chart 1st May 2009

With all of Europe closed for the May Day Holiday and others on Monday trading in the currency markets and the euro vs dollar, in particular, will be characterized by very thin volumes and erratic price movements.   Yesterday’s price action was perfect for intra day trading and on the daily price chart has given us a strong bearish signal for next week (thin volumes notwithstanding) and we should therefore see a fall in the euro vs dollar in due course should this signal be confirmed.   Whilst yesterday’s high of the day managed to break above 1.3350 it failed to hold this price point and the closing price is now back in the downwards trending channel of the past few weeks.  For any move lower to be confirmed we will need to see prices break below all three moving averages once again and to penetrate the current resistance in the 1.31 region.  If this occurs then we could see a re-test of the 1.2900 level or below and a further downwards dip with a lower high and lower low suggesting that the trend is re-established.  This may take a few days before it emerges, and for the euro bulls only a decisive break above 1.35 will provide the positive signal for a move higher.

My trading suggestion for today is to stand aside given the total lack of volume and wait for the market participants to return. In the meantime you can keep up to date with all the latest fundamental news, latest currency news and live currency charts by simply following the appropriate links.  In addition I have provided information on an excellent ECN broker.