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Euros To Pounds – 4th February 2009

As I suggested yesterday, we needed to treat the bullish harami signal with some caution, and indeed this has now failed to produce any confirmation, with the bearish trend now continuing in the short term. Yesterday saw a small doji cross candle, and certainly nothing to support a reversal in prices. The reason I was concerned was simply that the move had not been in place long, and in any $echnicallysis, this is always an important factor to consider when looking for longer term reversals. In this case, whilst the harami is an excellent reversal signal, it does depend for its validity on the move having been in place for some time, and in this case, the move had effectively only just started. With the moving averages all pointing downwards, and with prices having failed to breach any of these yesterday, then I would expect a fall today, and would suggest that small short positions are the order for the remainder of the day with a tight stop loss above the 0.9100 region. The main news in Europe and the UK has already been released, and more details can be found on the following sites : euro to dollar, pounds to dollars.

The short term outlook is bearish, the medium and long term are sideways