Euro falls to new lows
The euro could see new lows against the dollar after dropping below major support yesterday after trading below $1.4275 which was on an ascending trend line connecting the lows of Jan. 10, March 11 and April 1. It also dropped through $1.4267 which was the 20- day moving average.
Momentum indicators such as the moving average convergence/divergence, or MACD, also suggest the euro will fall after trading at $1.4231 in Tokyo after falling to $1.4158 yesterday. This was lowest level since April 5.
The euro last traded at $1.40 on March 18 and has weakened 2 % since reaching a 15-month high of $1.4520 on April 12 and 13. The MACD for the euro was 0.0104 today, below the so-called signal line of 0.0125, which suggest the currency will weaken as it is below the line.
MACD is a gauge of momentum and is calculated by subtracting the 26 day exponential moving average from the 12- day average. The signal line is normally a nine day exponential moving average of the MACD, and provides buy and sell signals. .
