Monday, April 20, 2009
Euro Dollar Relationship
We return the discussion of the pair EUR / USD because this time we see that there has been a strong movement to strengthen the dollar. Slowly but consistently the Dollar was gaining to the Euro, and recovered in 5 cvs. We signaled that earlier in our analysis of March 17 th. (Spanish version only)
At that time, we anticipated the rise from 1.30 to 1.35. As is evident from the graph at that day the USD hit a significant leap upward. Today, it has broken the barrier of 1.30, but downturn, and also in a violent manner.
It is known that when prices touch the bollinger bands on the bottom, that is an indicator of the market botton, and an opportunity to purchase. We will have to see the development of this pair, but if we follow the bollinguer bands we should buy Euro and sell dollar.
If you look at the Relative Strength Index RSI in the graph, we can see that when the EURUSD jump from 1.30 to 1.35 the index was above 70 (overbought) and when fall, is below 30 (oversold). At this time, the RSI is escalating.
Press the image to enlarge.