Thursday, December 17, 2009

EUR/USD ; Will the downward trend continue? Forex forecast

Above is the recent EUR/USD displayed since the 12th of this month, the day the EUR 'collapsed' against the USD. When things like this happen immediately the question rises on how long the trend will last. Looking at the chart it almost looks like a ball being tossed in a pipe (grey bars) bouncing its way down. But in order to understand where this is heading we need to pull more information up, the fundamentals. When it comes to this pair I like to know what wall street is doing first. It turns out the DOW at the moment is about 1% lower due to jobless claims rising more then previously thought, taking along financials with them. Trading at the end of the week I always find a little tricky especially now with the holiday season around the corner. Checking several forex resources it looks like the downwards trend will continue. Aggressive buying of the USD is still happening and probably will last until after the weekend. That's why a short position isn't a bad idea however use caution. Going by the chart above it's possible the EUR will trade towards 1.4450 in the next few hours until selling off again under 1.4300.

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