euro vs usd

Euro vs Dollar 8 July 2010

The short squeeze higher for the euro vs dollar appears to be coming to an end with yesterday’s doji cross candle signalling a weak market, lacking both momentum and positive sentiment.  Indeed in this morning’s early trading the pair appear to be struggling once again, having touched USD1.2688 overnight are now trading lower at USD1.2653 at time of writing, confined once again to a very narrow trading range.  The price congestion now ahead between USD1.2650 and USD1.2835 may well cap the rally at this point and, if so, we can expect to see a sharp move lower in due course with the pair breaking back below the 3 short term moving averages which are currently underpinning the move.

eurodollar trend

Euro vs Dollar Monthly Forex Chart 8 July 2010

Longer term, of course, the outlook is still heavily bearish as evidenced on the monthly chart where only the 200 month moving average has provided a platform for the recovery we are seeing in July.  Once this indicator is broken then we can expect to see the bearish trend established once again with USD1.15 being our longer term target and some market analysts even forecasting a drop to parity in due course (see video link below).

Today’s fundamental news is centred on the ECB interest rate decision and statement while in the US we have the weekly unemployment claims and crude oil inventories.  Of these releases the ECB statement could provide a degree of volatility.

What is one of the best retail forex trading platforms?  In my view it is Metatrader 4.  Advanced, powerful & intuitive it now comes with ECN execution, so you can happily scalp away without broker or dealer intervention.  Just download your free demo copy of MT4 by following this link – download metatrader free –  and get started today.  Don’t forget to follow my daily posts for updates and analysis of the forex markets to help you with your forex trading – so good luck and good trading.

A “good” euro decline