Euro vs Dollar Chart 16 Aug 2010

A seminal week for the euro vs dollar which closed on the weekly chart with a wide spread down candle and giving us a clear bearish engulfing signal as a result and almost certainly signalling the end of the recent short squeeze higher.  The extent of the rally caught many analysts by surprise but as we have been forecasting over the last few weeks the rally has been looking increasingly weak particularly as the euro vs dollar pushed towards the deep price congestion between USD1.33 and USD1.3750 coupled with the additional pressure from both the 40 day and 200 day moving averages above.  Whilst last week’s steep fall was largely triggered by the FOMC statement the extent of the fall came as no great surprise and provided this signal is validated then expect to see the euro vs dollar continue to move lower over the next few weeks.  In early trading today the pair has managed to recover slightly and currently trade at USD1.2816 having found a small platform of support from the 40 day moving average which also prevented a steeper fall on Friday.  However, once this has been breached, and coupled with the bear cross signal of the 9 day moving average below the 14 day moving average, expect to see the pair trade lower as a result, initially testing USD1.2712 followed by USD1.2480 and thereafter USD1.2354 in due course.

All the fundamental news for the euro vs dollar can now be found on my main forex trading site.

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Euro vs Dollar Chart 12 Aug 2010

Tuesday’s FOMC meeting may, at last, have brought the recent very long “short squeeze” in the euro vs dollar to an end with yesterday’s forex trading session ending as a wide spread down candle which saw the pair close at USD1.2849, stopping just short of the 40 day moving average This morning has seen the pair attempt to rise only to fall back once again towards the 40 day moving average, which is now the only barrier left to a deeper move to re-test major support in the USD1.25 price region.  From a fundamental perspective one the reasons for yesterday’s sharp fall can be found in the bond market which has seen a dramatic inflow of cash with the yield in 10 Treasuries falling to their lowest point since the middle of last year – in other words it is the bond markets which now appear to be driving the exchange rate.

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Euro under pressure as debt concerns resurface

Treasury yields tumble on FED moves

Euro vs Dollar Chart 9 Aug 2010

Friday’s non farm payroll data helped to push the usd index below the 200 day moving average as well as adding some further bullish momentum to the euro vs dollar currency pair which once again closed the forex trading session above all three shorter term moving averages and closer to the 200 day which sits at USD1.3500 price handle.  Today’s price action has been somewhat muted as markets wait for tomorrow’s FOMC interest rate decision and statement as well as a raft of fundamental news out of China.  This month’s FED’s decision has come at a critical time for all markets given the somewhat precarious state of the US economy which threatens to tip back into recession.  Market commentators are speculating whether the FED will once again start some form of quantitative easing programme in order to give the economy some traction which will bear the brunt of such a decision.  From a technical perspective the daily chart could not be clearer, the euro continues to be bullish and does not show any sign of any kind of pullback in the short term.

All the fundamental news for the euro vs dollar can now be found at the main forex trading site.

What is one of the best retail forex trading platforms?  In my view it is Metatrader 4.  Advanced, powerful & intuitive it now comes with ECN execution, so you can happily scalp away without broker or dealer intervention.  Just download your free demo copy of MT4 by following this link – download metatrader free –  and get started today.  Don’t forget to follow my daily posts for updates and analysis of the forex markets to help you with your forex trading – so good luck and good trading.

Dollar in doldrums as FED meeting looms