Euro vs Dollar - Daily Chart EUR/USD 8th June 2009
The bearish engulfing candle outlined in last Wednesday’s post for the euro vs dollar, was duly confirmed on Friday with a wide spread down bar with a deep upper wick, which breached both the 9 day and 14 day moving averages, eventually closing the session below the latter. The reason for the wide spread was almost entirely due to the Non Farm Payroll data released in the US, which came in significantly better than expected, and as a consequence US dollar strength returned to the market, reversing the pattern of the last few weeks, and clearly evident on the US dollar index chart. The question now of course, is whether this is a temporary pullback, or a longer term trend reversal, and with the possibility of a light at the end of the recession tunnel, we may be in for a period of US dollar strength as a result. However, the next few weeks and months may be volatile as traders and investors flip between the fear of a depression vs the fear of raging inflation with cheap interest rates and an over supply of money in the system.
From a technical perspective this morning’s trading session seems to have partially answered the question with a continuation of the price action of Friday, however, until we see a break and hold below both the 40 day moving average and the strong resistance area currently in place at 1.37,then it is very hard to be sure at present. However, it is interesting to note that the 1.44 region provided the barrier to any move higher once again ( as in January ), which saw an immediate fall back to the 1.25 region. With very little fundamental news on the economic calendar for today, the main price action is from the after shock of Friday’s news in the US, coupled with the response to the European election results overnight, and I have covered the main items on the euro dollar site.
You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links. I have also included details on an excellent ECN broker.
