Monday, 21 Sep 2009

Dollar Falls from Daily Highs

During the New York trading hours, the Dollar reversed course, shedding most of its morning gains against the EUR, but still remained in the black against the Yen. The EUR/USD dropped as low as 1.4610 but later regained ground. The USD/JPY climbed to the 92.51 price level but failed to break the resistance line.

Profit taking was noticed in this afternoon's trading as there has been little news on the calendar today to sway traders into riskier positions. Most major equity indexes were down on the day. This spells bad news for EUR/USD bulls as the currency pair has been tracking equities.

Traders may like to take note of the Rounded Top formation that has appeared on the 1-hour Crude Oil Chart. Points 1 and 2 show a distinct oval formation. This formation can anticipate a change in a trend from up to down as well as a continuing trend. As such, we may expect the price to continue its descent in the short term.