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Forexpros Daily Analysis - 02/08/2010

Discussion in 'Forex Daily News & Outlook' started by forexpros2, Aug 2, 2010.

  1. forexpros2

    forexpros2 Member

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    ForexPros Daily Analysis August 02, 2010


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    When: Thu, August 12, 2010, 11:00a.m. GMT

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    ---

    Fundamental Analysis: Interest Rate Decision

    The Reserve Bank of Australia (RBA) decision on short term interest rate.
    The decision on where to set interest rates depends mostly on growth outlook
    and inflation. The primary objective of the central bank is to achieve price
    stability. High interest rates attract foreigners looking for the best
    "risk-free" return on their money, which can dramatically increases demand
    for the nation's currency.
    A higher than expected rate is positive/bullish for the AUD, while a lower
    than expected rate is negative/bearish for the AUD. The analysts predict a
    future reading of 4.50%.

    ---

    Euro Dollar

    The Euro broke support specified in yesterday's report 1.3028, and came
    close to hitting the suggested target of 1.2962, but it stopped a few steps
    before it, then it bounced clearly. It is clear that the Euro is facing some
    difficulties ahead of and around 1.31: there is the well known resistance
    1.3092, Friday's top 1.3105, and now we can also see that after the open,
    the price has bumped into 1.3086 a couple of times during the Asian session.
    If the price can go back to trade above 1.3086, reaching 1.32 (and above)
    will be only a matter of time! The targets in this case will be 1.3200 & the
    bottom we still remember 1.3266. On the other hand, short term 61.8%
    Fibonacci level has became the most important support for today, especially
    that it is just above the rising trend line from June 29th low on the hourly
    chart. In case we break this support which is at 1.3020, the price will drop
    & correct the whole move up from Tuesday's low 1.2731 to yesterday's top,
    which will ideally target the area between 1.2950 & 1.2874. It is worth
    mentioning that the latter is the most important support for the time being.

    Support:
    * 1.3020: Fibonacci 61.8% for the rise from Friday's low.
    * 1.2950: Jun 27th low.
    * 1.2874: Fibonacci 38.2% for the whole rise from Jul 21st low to Friday's
    high.

    Resistance:
    * 1.3086: Asian session high, tested twice.
    * 1.3200: Apr 23rd low.
    * 1.3266: Apr 25th important bottom.

    ---

    USD/JPY

    Finally, we have clearly surpassed wave 5 bottom, which indicates that the
    correction we have been monitoring for the past days is finally over, which
    makes it official: we are in a new down wave! But the bounce from Friday's
    low 85.93, which is closing on the important resistance 86.81 this morning,
    warns of a correction to what we have seen of the new wave so far (the drop
    from 88.10 to 85.93). Nevertheless, with a correction in these areas, or
    without, dropping far below 86 and may be below 84.81 itself has turned into
    a most probable scenario. The resistance which will determine if this bounce
    from Friday's low will go on or stall, is 86.81. If broken, the Dollar will
    keep shooting higher, targeting 87.49 & then what we imagine as the
    "ceiling" for the price at this stage 88.10. But, if we break the exciting
    support 86.25 instead, we will start dropping to areas below Friday's low,
    we find 85.60 & 84.81 to be the most attractive of which.

    Support:
    * 86.25: Jul 16th low, just 2 pip below Thursday's low.
    * 85.60: the falling trend line combining the daily lows of Jul 1st & 16th.
    * 84.81: Nov 27th 2009 low, and the low of the last 15 years.

    Resistance:
    * 86.81: Jul 26th & 27th lows, and an obvious hourly support.
    * 87.49: Jul 29th high.
    * 88.10: Jul 28th top.

    ---


    Forex trading analysis written by Munther Marji for Forexpros.

    ---

    Disclaimer:

    Trading Futures and Options on Futures and Cash Forex
    transactions involves substantial risk of loss and may not be suitable for
    all investors. You should carefully consider whether trading is suitable for
    you in light of your circumstances, knowledge, and financial resources. You
    may lose all or more of your initial investment. Opinions, market data, and
    recommendations are subject to change at any time.
     
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