Euro vs Dollar Daily Chart - 11th Decemer 2009

Following the recent sharp decline in the euro dollar, the last couple of days has seen the pair attempt to rebase at the 1.47 price handle, with yesterday’s candle ending the currency trading session marginally lower on the day as a narrow spread down bar but with wicks to both the top and bottom.  The low of the day found some support from the 1.47 price point as indeed was the case the day before, and this level is now assuming an increased importance on the daily chart, and given the lack of meaningful fundamental news for Europe and only retail sales and UoM (University of Michigen Consumer Confidence) in the US combined with the end of another week, we may see a further period of sideways consolidation today ahead of the weekend.   Should the 1.47 price be breached then a further move lower is likely, initially towards the 1.45 and subsequently a much deeper move to 1.43 should this fail to hold.  With the 9 day moving average now crossing the 14 this is adding to the short term bearish picture and only a sustained break back above all three moving averages, coupled with a hold above the technically significant 1.5150 price point will indicate that a recovery and strong move higher is back on the agenda.

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