Euro vs Dollar - Daily Candle Chart EUR vs USD 19th June 2009

Euro vs Dollar - Daily Candle Chart EUR vs USD 19th June 2009

The euro vs dollar continued its sideways consolidation yesterday, ending the day with a narrow spread down bar with small wicks to both top and bottom, starting the day above the 9 day moving average and closing below it.  Once again prices flirted with the neckline of the head and shoulders of the last three weeks indicating once again that we are now at a critical juncture for this pair as we await a catalyst to fire the markets into life once again.  The 9 and 14 day moving averages are currently weighing down on the currency pair and provided the neckline holds then we should see a fall in due course, particularly as the consensus view among currency traders and speculators is that the Euro is currently overbought.  Should we see this fall then the first level of support is seen in the 1.36 region and if this is coupled with a break below the 40 day moving average then this could add some momentum to the move.   Given that we have no fundamental news on the economic calendar to speak of either in the US or Europe today, and coupled with the fact that we have “triple witching” in the option markets, my trading suggestion is to stay out as traders will be squaring positions ahead of the weekend anyway.  Today’s price action will almost certainly be constrained in a narrow trading range and indeed this pattern has already been set in train in this morning’s London session.

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