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Forexpros Daily Analysis - 16/09/2010

Discussion in 'Forex Daily News & Outlook' started by forexpros2, Sep 16, 2010.

  1. forexpros2

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    ForexPros Daily Analysis September 16, 2010


    Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
    Expert: Kris Matthews
    When: Thu, Sep 16, 2010, 07:00 ET

    Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.


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    Euro Dollar

    The Euro did not move enough to penetrate the support or resistance specified in yesterday’s report. But, when we investigate the rising move from 1.2586, we see that it is a correction for the previous dive from 1.3332, which topped very close to the Fibonacci 61.8% level. Yesterday’s high was 1.3035, the highest level since August 11th, whereas the important resistance is at 1.3047 (please refer to the attached chart). This resistance will determine everything for the medium term. If we break it, we will literally fly, and if we fail close to it, this pair will be frustrated and move south. That is why it will be our resistance of the day. If broken, we will target 1.3145 & 1.3237. On the other hand, it would sound bizarre to say that the Euro is weak, and we will not say that. But we do believe that as long as it is below 1.3047, it will be vulnerable. The first sign of a failure at 1.3047 will be going back to trade below 1.2973. If this happens, expect a big drop, targeting 1.2855 first, then the important and strong 1.2764.

    Support:
    • 1.2973: the rising trend line from
    • 1.2885: Fibonacci 50% for the rise from 1.2643.
    • 1.2764: Sep 9th high.

    Resistance:
    • 1.3047: Fibonacci 61.8% for the medium term. The most important resistance level at the moment.
    • 1.3145: Aug 3th low.
    • 1.3194: Aug 4th high.

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    USD/JPY

    The Dollar/Yen retreated more than 35 pips today, or 0.41%, this leaves a question hanging: after the intervention, what’s next? Yesterday’s support & resistance levels were not touched, and this pair calmed after the Japs stormed it up! But failure to break 85.89 which we talked about its importance yesterday, leaves possibilities of downside activity open. All the major Yen pairs jumped together during yesterday’s Asian session, gaining more than 2.5% each, which fueled speculation that the Japs have done it! Shortly after that, in a quickly arranged news conference, finance minister (Noda) confirmed it and said: “yes, we have intervened”! Finally ladies & gentlemen, here is your long awaited intervention. The Japanese authorities have had it after they saw 82 appears on the screens for the first time since 1995. A lot of people would now argue that this is not the time for technical analysis, but the intervention only takes a short period of time to be completed, then things go back into the hands of the market powers. This intervention has caused the price to break the falling trend line from June 4th top on the hourly chart, which resulted in reaching 85. Now, this surge has a huge barrier in front of it, which is 85.89! This is where the falling trend line from May 5th top is running currently. If broken, the price will fly, targeting 86.81 & 87.56. On the other hand, the support is at 84.25, and if broken we will drop to the important 83.73, then 82.87.

    Support:
    • 84.25: Fibonacci 38.2% for the short term.
    • 83.73: Fibonacci 61.8% for the short term.
    • 82.87: Sep 14th low, and the low for the last 15 years.

    Resistance:
    • 85.89: the falling trend line from May 5th top on the daily chart
    • 86.95: Jul 1st low.
    • 87.56: Jul 20th high.

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    GBP/USD

    The Pound jumped yesterday, to break the resistance specified in yesterday’s report 1.5533, and then reach the first suggested target 1.5464 successfully & accurately as the price topped only 4 pips above it. Whet is even more important than meeting our 100 pips target is what we see when we investigate the rising move from 1.5295. When we do, we see that it is a correction for the previous dive from 1.5996, which topped very close to the Fibonacci 50% level. Yesterday’s high was 1.5650, the highest level since August 19th, whereas the important resistance is at 1.5646 (please refer to the attached chart). This resistance is pretty important, but we have to admit that the most important level is definitely 1.5728. This level will determine everything for the medium term. If we break it, we will literally fly, and if we fail close to it, this pair will be frustrated and move south. Or resistance of the day is 1.5646. If broken, we will target 1.5728 & 1.5854. On the other hand, it would sound bizarre to say that the Pound is weak, and we will not say that. But we do believe that as long as it is below 1.5728, it will be vulnerable. The first sign of a failure at 1.5646 will be going back to trade below 1.5585. If this happens, expect a big drop, targeting 1.5463 first, then the important and strong 1.5370.

    Support:
    • 1.5585: the rising trend line from Tuesday’s low on intraday charts.
    • 1.5463: Fibonacci 61.8% for the short term.
    • 1.5370: Aug 24th low.

    Resistance:
    • 1.5646: Fibonacci 50% for the whole drop from Aug 6th top.
    • 1.5728: Fibonacci 61.8% for the whole drop from Aug 6th top.
    • 1.5854: Aug 4th low.

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    Forex trading analysis written by Munther Marji for Forexpros.

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    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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