Dated Release 23 Aug 09 at www.thegeekknows.com

Following up on my EUR/USD 1 year on article, i will like to now explore the relationship of the EUR/USD and S&P 500 for the past one year.

Why is this important?

Personally, although trading the chart is important, forex is never all about charts. The entire financial market is one connected system and whatever is happening or perhaps going to happen, clues may be sniffed out.

Lets take a look at the one year chart.

( Blue = EUR/USD, Orange = S&P 500 )

eursp

During the first 2 regions bounded by my lines, you can see that both the pair and s&p 500 are in a bearish trend.

If you take a look closer in the small region in between the 2 bearish period, you can see both EUR/USD and s & p 500 taking a breather.

Right after March 09, the EUR/USD started it’s upwards climb and is now around -5% off it’s initial value at AUG 08 08.

Likewise for s&p 500, it has been somewhat rallying since after March 09 and has improved from around -47% to it’s current around -22% versus AUG 08 08.

One thing to note is that the moves are usually more dynamic over at the s&p 500 and hence usually drops or gains in the equity markets should not be taken as an immediate sign to buy or sell the EUR/USD immediately. What we are looking out for are sustained trends.

Looking at the current chart, can someone tell me what the trend apparently is now?

Regardless, remember that this is not all there is and we are approaching a resistance line in the EUR/USD. ( You can read about this in my EUR/USD 1 year on article )

Trade safe ya.

You can visit my blog for more EUR/USD and forex articles.

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