Euro vs Dollar Daily Chart - January 29th 2009

Euro vs Dollar Daily Chart - January 29th 2009

Yesterday saw the formation of another doji candle in the euro vs dollar currency pair, indicating yet more indecision in the market, and a possible weakness in any further move up following the bullish engulfing candle of Monday. Whilst prices have just climbed above the 9 and 14 day averages, this may only be a temporary move before further weakness enters the market.  For any sustained move upwards we need to see the 40 day moving average breached, and a move above the resistance area at 1.3350, which would then provide additional support to any upwards move. Last night’s FED statements and interest rate news sent the pair falling back on a “hold” policy.

It is also interesting to note that the downtrend from the middle of December is still intact with lower highs and lower lows, and until we see this reversed or continued in any significant way, then trading in the euro vs dollar will be difficult. If you are trading today intra day, or scalping I would suggest small long positions again, but with protective stops below at 1.2850. We have three significant sets of data being released this afternoon in the US, so please trade carefully. You can find details of them here on the euro to dollar site.

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