Euro vs Dollar - Daily Candle Chart 2nd February 2009

Euro vs Dollar - Daily Candle Chart 2nd February 2009

Friday saw another down day which I’m pleased to say was as expected and added to the previous bearish sentiment with the wide down bar of Thursday. It is interesting to note that prices have opened gapped down this morning at 1.2750,  50 pips lower than the closing price on Friday. Whilst this is generally a positive signal that the bearish move will continue for today, the only word of caution I have concerns the support level in the 1.2500 to 1.2700 region. For the euro dollar to fall further, we will need to see this region penetrated and broken, but I suspect that this area may act as a base for the pair to try to rebound back up. All the moving averages are pointing to lower prices. My suggestion for today would be small short positions, with protective stops at 1.3100 or above, and do not be surprised if we see a small rally later. I have updated the euro to dollar site with the fundamental news out later, which can be found by following the link. As it is the start of a new month, I will also be adding the weekly chart and the monthly chart later today, so that we can look at the longer term trends of the currency pair.

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