Euro vs Dollar Daily Candle Chart - 4th February 2009

Euro vs Dollar Daily Candle Chart - 4th February 2009

As you will see from today’s chart for the euro vs dollar, I have added the trend line for the pair, as I believe this is quite revealing. Yesterday we had a rally in the pair with a wide spread up candle, which penetrated both the 9 day and 14 day averages, but as you can see from the lines drawn, the prevailing trand has not yet been broken, and we may see prices bounce off the trend line, and fall back. As I have said before, for any meaningful reversal in the trend we will need to see prices breakout above the 1.3300 resistance region, and consolidate higher, before we can say that any medium term reversal has occurred. The problem for today is that there are several significant pieces of data out today, which I have already updated on the euro to dollar site. The situation is even more difficult at the moment as the support region at 1.3000 is now in play, and could provide support to any move higher. If you are planning to trade the news or intra day, then based purely on the trend lines I would suggest small short positions with stop loss at 1.3250 or above.

The short term outlook is sideways, with the medium to long term bearish.