Euro vs Dollar - Daily Candle Chart 30th July 2009
Yesterday’s wide spread down bar for the euro vs dollar, confirmed with some authority the bearish engulfing candle I signalled on Wednesdays commentary for the pair, would seem to suggest that the 1.43 price handle was indeed the straw that broke the camel’s back. However, before we rush to assume that we are now seeing the start of a longer and deeper move lower for the euro vs dollar, there are several points we need to consider carefully at this stage. First, the low of yesterday seemed to find some support from the 40 day moving average which provided a cushion to a deeper move. Second, there is a strong intermediate level of support at the 1.40 price handle, both psychological and technical, which again seem to provide a platform yesterday. Finally, given the strong sideways consolidation of the last few weeks it would not be a great surprise, given the fragile nature of the US dollar at present, to see a short term reversal back higher once again. For any longer term trend trading, we need to wait at the for the major support level to be breached at the 1.38 price level – should this occur then we can trade with a degree of comfort on the short side, knowing that any interim reversal higher will then have to contend with a concentrated level of price action above, which will take a considerable effort to penetrate. My advice therefore is to wait for this to occur in due course, and coupled with the moving averages weighing down, this should present the right conditions for a longer term trade to the short side. There is very little in the way of fundamental news today on the economic calendar, but I have highlighted the main items on the euro dollar site for you in more detail.
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.
