Euro vs Dollar Daily candlestick Chart - January 28th 2009

Euro vs Dollar Daily candlestick Chart - January 28th 2009

Trading the euro vs dollar is extremely difficult at the moment, and you need to trade with care and take small profits off the table ( in my view ) as they become available. Yesterday’s candle gives us little help I’m afraid, other than inching the pair slightly higher and just breaking above the 14 day moving average. The 40 day average remains intact, and for any significant move up, we need this to be broken significantly. Yesterday’s candle was a small doji or spinning top, which has added weight since Monday’s candle was a wide up bar. The two candles together indicate possible weakness in the move, and that is has become a little “tired”. In other words the doji shows us that the euro vs dollar is vulnerable and this may be a transition point in the short term. As usual we will need to wait and see.

For those of you who feel the urge to trade today on the euro dollar pair ( I am not in case you are wondering ) I would suggest the same formula as yesterday – in other words small long positions with wide stops below. Traders in the markets are likely to short cover on any sustained break above the 1.3250 to 1.3300 region, and don’t forget that the US dollar will move this evening on the FED interest rate news so place your stops with care. If you would like a view on the fundamentals of the euro to dollar pair please just follow the link.

The short term is bullish, the medium term is sideways and the long term bearish.