Euro vs Dollar Daily Chart -15th October 2009

Euro vs Dollar Daily Chart -15th October 2009

The euro vs dollar ended the day yesterday with another strong move higher, ending the session with a wide spread up bar, which added considerable momentum to the trend, and propelled the currency pair towards our initial price target of 1.50, which should be achieved later today. With the strong level of support now below, and with little in the way of resistance above, the euro vs dollar should continue to surge higher in the short term, helped by the sustained and unrelenting US dollar weakness which shows no signs of abating. Indeed the outlook for the USD index is that 72 is the next likely point for any technical support for the US dollar, so we should see all the major cross pairs benefit as a result in the medium term. The current bullish trend for the euro vs dollar is only likely to start to falter once the prospect of interest rate rises in the US becomes a possibility, which seems a remote possibility at present. Until then, there is only one way to trade the euro vs dollar, and that is to the long side of the market.

The main fundemental news items on the economic calendar for today are all about CPI ( and Core CPI), which is due for release both in Europe and in the US, with the weekly Unemployment Claims completing the economic outlook. In Europe the forecast is for the CPI figures to remain unchanged from -0.3% last time, whilst in the US the same number is forecast today to fall to 0.2% from 0.4% last time, and if correct will push the prospects for an interest rate rise even further into the distance, no doubt weakening the US dollar still further, so we should see the 1.50 price level easily breached later this afternoon as a result. The unemployment claims are unlikely to provide any positive news either, and are forecast at 524,000, marginally higher on last week’s 521,000. Finally we have the oil inventory numbers which are a day later than usual due to the Columbus day holiday on Monday, and as always will have more of an impact on the Canadian dollar, rather than the US dollar with the forecast being +1.0M from -1.0M last time.

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