Euro vs Dollar - EUR vs USD Daily Candle Chart 3rd June 2009

Euro vs Dollar - EUR vs USD Daily Candle Chart 3rd June 2009

The euro vs dollar continued its strong move higher yesterday once again, with the daily candle finishing on a wide spread up bar, and with a deep lower wick, suggesting that the temporary reversal in early trading was snuffed out by the bulls taking charge once more, and closing the session marginally below the 1.4300 price level. With continued weakness in the US dollar, which is suffering at the hands of quantitative easing ( amongst other factors) the euro is currently a major beneficiary, and with all three moving averages pointing higher there is nothing on the daily chart to suggest that we are likely to see any reversal just yet, with our next target for the pair now firmly in sight at 1.45. This could prove to be the defining level for the current trend, as the resistance at this level is both deep and significant and could well provide an insurmountable barrier to any progress higher, with most analysts now suggesting that 1.4550 could be the top of the current rally. In addition with continued US dollar weakness, it is also possible that any fundamental news in the US which fails to meet the forecast, could result in a fall in equities and a consequent return to the US dollar as a safe haven, and we therefore need to be more cautious in our approach over the next few days. Whilst the momentum is clearly still bullish, I would suggest tightening any stop losses on existing positions to lock in profits, and to wait for a pullback below 1.4100 in the daily chart before adding any new long positions.  All the fundamental news is covered for you on the eur/usd site.

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