Forex Analysis Euro vs Dollar 1 Sep 2009

Forex Technical Analysis

With the UK market closed yesterday for a national holiday, trading volumes in the euro vs dollar were relatively thin, and as a result we saw a volatile day of forex trading on little news, with the candle ending as a doji, and perhaps more significantly and ‘inside day’ or the Japanese term ‘harami’. This is often the first signal that a reversal is likely, although given the fact that we are in effect consolidating sideways, the signal probably has less weight on this occasion. Indeed the low of yesterday’s candle seemed to find support from the 14 day moving average, with the close of the trading session balanced on the 9 day, both of which suggest that the euro vs dollar will continue to edge higher in trading once again.  The key to the medium term remains the new resistance level now in place at 1.4450, and only a break and hold above here will signal a breakout and sustained move higher.  With all three moving averages providing solid support my trading suggestion for today is to attempt small long positions intra day, but only as far as the initial target outlined above. Should we subsequently clear this level in due course then longer term trend trades may well profit from the move.

Fundamental Forex Analysis

The new month of fundamental news for Europe kicks off with German Retail Sales forecast to show an improvement from last time at -1.3% to a positive 0.7%, and if met will once again confirm that the recession is beginning to flatten as the long slow recovery begins. This is followed later in the morning with the German Unemployment change which is also expected to provide further good news for Europe with a forecast of +33k against a previous of -6k, although this ‘good news story’ may be counterbalanced by the Unemployment Rate for Europe which is expected to show an increase once again from 9.4% last time to 9.5% today, although being a lagging indicator this fundamental news may not surprise the forex markets.

Two items of fundamental news dominate the US economic calendar this afternoon with ISM Manufacturing and Pending Home Sales, the first of which is expected to nudge over the psychologically important 50 level, indicating an economy in contraction to one in expansion, with a figure of 50.6 forecast against a previous of 48.9, but once again ( as in Europe) this good news may be balanced by Pending Home Sales which are forecast at half last time at 1.7% against a previous of 3.6%, but given we are still in the summer, this number may not concern the forex markets unduly. The day ends with several minor news items all of which are covered in more detail on the econimic calendar.

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.

Euro vs Dollar - Daily Forex Analysis 31st August 2009

Forex Technical Analysis

The euro vs dollar continues to struggle to break above the 1.44 technical level on the daily forex chart, which increasingly seem to be becoming a key level for the forex pair. Following Thursday’s strong move higher, technical view was that this should follow through on Friday, but with a return of some limited US dollar strength, the pair fell back in later forex trading markets to close the session and the week with a down candle, with the low of the day finding some support from the 9 day moving average. With seven failed attempts to clear this level, the resistance now building is becoming increasingly significant, and a barrier to any progress higher, however, should we see a break and hold above this level in due course, then this will provide a solid platform to any move higher in due course.

Fundamental Forex Analysis

There is very little in the way of significant fundamental news on the economic calendar for Europe today, with only Italian Retail Sales, Italian Preliminary CPI and the European CPI Flash estimates reporting. Of these the most important is the last, which measures the change in the price of goods and services purchased by consumers, and is therefore an excellent guide to the current inflationary or deflationary picture in Europe. The forecast for today is for -o.4% against a previous of -0.7% so a slightly better picture than last time should this number be correct. For the US meanwhile, the only fundamental news item due out is the Chicago PMI data, which if the forecast is correct, shows an economy inching its way out of the depths of recession.

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.