Euro vs Dollar - EUR vs USD Daily Chart 2nd July 2009

Euro vs Dollar - EUR vs USD Daily Chart 2nd July 2009

The Euro received two significant boosts yesterday which at one point resulted in the EUR/USD touching 1.42.  The first salvo was yet anti-dollar rhetoric from Fed Member Yellen clearly stating the necessity and desire to keep interest rates low – indeed he even went so far as to say: “we should want to do more. If we were not at zero, we would be lowering the funds rate” Next the Chinese weighed in with comments surrounding the reserve status of the US Dollar and their wish to have this topic included in next week’s G8 summit in Italy.   However, such comments from the Chinese have to be seen in the context of their view of time and history.  For example when asked about the French Revolution  Zhou Enlai is supposed to have responded that it was too early to judge its impact.   Technically yesterday’s candle ended on a wide spread up bar with only minor wicks to the top and bottom, and perhaps the most significant aspect was the support provided by the 9 day moving average which has now crossed the 14 day once again to present a bullish tone.   With a holiday shortened trading week and the imminent collision of Europe and the US with their respective key fundamental news items today is not a day for trading, as only a break and hold above 1.43 will confirm the current upward momentum.  I would suggest that today EUR/USD traders take the opportunity to look beyond the initial knee jerk reaction and take a longer term view but maybe not quite so long as the Chinese.

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