EuroDollar Daily Chart - EUR/USD Currency Rates 17th June 2009

EuroDollar Daily Chart - EUR/USD Currency Rates 17th June 2009

With the head and shoulders pattern emerging ever more clearly on the daily euro vs dollar chart yesterday’s candle merely served to reinforce the apparent weakness that we are now seeing in the Eurodollar pair with the attempt to rise firmly squashed by the Dollar bulls.   The candle ended the day with a deep upper shadow, a small body and sandwiched firmly between the 9 and 40 day moving averages with the 14 day adding pressure from above.  This price action appears to be recurring in this morning’s early trading with the 9 day moving average now proving to be a barrier to any move higher.  With the Dollar precariously balanced, but showing signs of a potential recovery on the Dollar Index, it appears that the head and shoulders may well develop into a medium term bearish trend in the next few days.  A break below the 40 day moving average should confirm this view, particularly if coupled with a breach of support in the 1.36 price region, and if both of these factors combine then we could see a much deeper move, initially to 1.33 followed by 1.31 thereafter.  All the main items of fundamental news on the economic calendar for the euro vs dollar can be found on the main Eurodollar site.

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