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Forexpros Daily Analysis - 05/08/2010

Discussion in 'Forex Daily News & Outlook' started by forexpros2, Aug 5, 2010.

  1. forexpros2

    forexpros2 Member

    Oct 20, 2009
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    ForexPros Daily Analysis August 05, 2010

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    Do you find that getting the direction right is something you need to take
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    Fundamental Analysis: Unemployment Rate

    The Unemployment Rate is a measure of the percentage of the total labor
    force that is unemployed but actively seeking employment and willing to work
    in the US. A high percentage indicates weakness in the labor market. A low
    percentage is a positive indicator for the labor market in the US and should
    be taken as positive for the USD. The analysts predict a future reading of


    Euro Dollar

    The Euro broke both the support and resistance specified in yesterday's
    report, without being able to reach the targets specified. However, the
    dollar managed to drag the Euro to 1.3130. And as we said yesterday's
    report: "The fact that the rising move is slowing down warns of a possible
    correction for the whole rise from Friday's low. Such a correction would be
    a violent one, with its size a little less than 200 pips, since its ideal
    target is at 1.3086." And up until now, we have seen the price dropping from
    Tuesday's top almost 130 pips! Technically, what is really important is that
    we are approaching a very important trend line, and are about to test it:
    the trend line rising from June 29th low on hourly the chart, which is
    running very close to yesterday's low. Therefore, we should keep eyes & mind
    open today, and consider all scenarios, and keep separate trading plans
    ready. If we test the above mentioned trend line, it will be the single most
    important technical event for the rest of the week. This line is at 1.3130,
    and should not be broken in order to keep the technical outlook positive.
    But if broken, we will witness a strong drop to 1.3026 at least, and
    probably will be followed by a test of the important 1.2933 as well. On the
    other hand, short term resistance is at 1.3194, and it is the key for more
    gains. If we break it, we will target 1.3311 & 1.3383.

    * 1.3130: the rising trend line from Jun 29th low & yesterday's low. The
    single most important support for the time being.
    * 1.3026: Jul 20th high.
    * 1.2933: Fibonacci 61.8% for the rise from 1.2731.

    * 1.3194: the falling trend line from Tuesday's high on intraday charts.
    * 1.3311: Mar 24th low.
    * 1.3383: Mar 31st low.



    The Dollar/Yen did not break the support specified in yesterday's report,
    not even with a single pip. It consolidated above it, and edged higher until
    it reached 86.43. We can classify that as a clear attempt to rebound, coming
    after the current falling wave (which we talked about several times) has
    reached its first suggested target at 85.52. Nevertheless, we see these
    attempts as weak and shallow. We believe the falling wave will continue to
    seek lower targets, after a limited correction, but what are the next
    targets? In the attached chart, which is a weekly one, we can see the
    falling channel from Sep 07 top. Although the bottom of this channel is very
    far away, and is just above 74, but there is an interesting trend line
    inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is
    around 82.65 currently, providing us with a perfect target for this dropping
    wave, since we still expect, as we did before, that it will dive below
    84.81. Therefore, we expect the price to reach this target, and as we do, we
    also realize that the limited volatility of this pair indicates that this
    will take some time. As for the short term, the support is at 85.74, and
    breaking it would indicate that we are already moving lower with the
    objective of breaking 84.81, and reaching lows not seen in 15 years. This
    break will target 84.81 first, then 83.87. The resistance is at 86.58, and
    if broken, the price will continue its bounce, targeting 87.49 & the
    important 88.10.

    * 85.74: Fibonacci 61.8% for yesterday's bounce.
    * 84.81: Nov 27th 2009 low, and the low of the last 15 years.
    * 83.87: Fibonacci extension level 138.2% for the falling wave from 86.86,
    compared to the wave which started at 88.10.

    * 86.58: the retest level for the rising trend line which combines the lows
    of Jul 16th & 22nd.
    * 87.49: Jul 29th high.
    * 88.10: Jul 28th high.


    Forex trading analysis written by Munther Marji for Forexpros.



    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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