Euro vs Dollar 6 Oct 2009

Euro vs Dollar 6 Oct 2009

Given the level of negative dollar sentiment in yesterday’s press and which has continued this morning the  euro vs dollar pair only managed a small move higher yesterday, ending the trading session with another narrow spread up bar, which broke above all three moving averages and found good support from the 14 day average, a positive signal for the trend. The key technical level, of course, remains the 1.48 price handle and should this level be breached, and subsequently held, then we will see a run towards our initial price target of 1.50 in due course.  The only slight concern from yesterday’s price action is the upper wick to the candle, which suggest a degree of bearish selling in the market, and if this is confirmed today them we may see a pullback in the short term, before the euro vs dollar continues to move higher and eventually break above the 1.48, and subsequently 1.50 price points.  With little fundamental news on the economic calendar for either the Euro or the Dollar other than final quarter GDP figures for the Eurozone which came in worse than expected at -0.2% and German Factory orders the markets may take their lead from some second tier releases due out in the US later this afternoon.  The first is the crude oil inventories which are expected to show a further build across the board and confirming the slow nature of this “recovery” and the second is the amount of outstanding US consumer credit.  If the recovery is to gain some serious traction it cannot do so without the aid of the US consumer.   Should these numbers spook equities then we may see some recovery in the US dollar.