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Forexpros Daily Analysis - 26/07/2010

Discussion in 'Forex Daily News & Outlook' started by forexpros2, Jul 26, 2010.

  1. forexpros2

    forexpros2 Member

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    ForexPros Daily Analysis July 26, 2010


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    ---

    Fundamental Analysis:CB Consumer Confidence

    The Consumer Confidence measures the level of consumer confidence in
    economic activity. It is a leading indicator as it can predict the consumer
    spending, which is a major part in the total economic activity. Higher
    readings point to higher consumer optimism. A higher than expected reading
    should be taken as positive/bullish for the USD, while a lower than expected
    reading should be taken as negative/bearish for the USD. The analysts
    predict a future reading of 51.00.

    ---

    Euro Dollar

    The Euro fluctuated violently on Friday, breaking both the support &
    resistance specified in the report, but only reaching the target in the case
    of the support. After breaking 1.2860, the Euro reached the first suggested
    target 1.2807 successfully. When looking at the hourly chart, we find that
    Friday's dive has stopped at the bottom of a new rising channel which will
    be placed under our focus for today. The bottom of the channel is at 1.2807,
    but after the strong bounce we seen late Friday, the price built another
    support ahead of the channel bottom at 1.2883. In case we break today's
    support (1.2883) we will drop to test the bottom of the channel at 1.2807 as
    a first target. And if this one is also broke, then the rising channel is
    broken, which would leave the Euro vulnerable to more downside activity,
    targeting 1.2731 as a first & immediate target for this break on the way to
    lower targets. On the other hand, the resistance is at the important 1.2942.
    If broken, the price will resume its bounce from channel bottom, targeting
    yet another test of 1.3026, and may be then 1.3075.

    Support:
    * 1.2883: the rising trend line from Friday's low on intraday charts.
    * 1.2807: the bottom of the rising trend channel on the hourly chart.
    * 1.2731: yesterday's low.

    Resistance:
    * 1.2942: Asian session top, and the falling trend line from last weeks top
    on the hourly chart.
    * 1.3026: Tuesday's & 2-month high.
    * 1.3075: Fibonacci 61.8% for the drop from 1.3816 to 1.1875.

    ---

    USD/JPY

    As we have said several times in last week's reports, signs show that the
    possibility of a rising correction to correct the fall from June 3rd top
    89.09 to July 16th low 86.25 is growing. On the top of these signs: the
    inverted hammer formation, which appeared on the daily chart, and the
    completed 5-wave move, and further more what looks to be the corrective
    waves (a) & (b) forming in an ideal manner (please refer to the attached
    chart), and wave (c) developing in an ideal fashion. Therefore, and even
    though we are negative about this pair on the medium term, we should not
    neglect these signs which force themselves upon us for today! Short term
    support is at 87.33, and if broken, the price will resume its drop after a
    3-wave correction, targeting 86.72 & 85.84. Resistance is at 87.67. A break
    here indicates that the odds of c continuation of the correction of the 5
    waves down from 92.87 are still massive. This will target 88.37, then 88.78.
    It is worth mentioning that breaking wave 5 bottom 86.25 even with a few
    pips would strongly indicate the termination of the correction we are
    currently living.

    Support:
    * 87.33: the rising trend line from Thursday's low on the hourly chart.
    * 86.72: Friday's low.
    * 85.84: Nov 30th 2009 low.

    Resistance:
    * 87.67: important hourly resistance, stopped the price several times after
    the open.
    * 88.37: Jul 12th low.
    * 88.78: Fibonacci 38.2% level for the whole drop from 92.87 (the 5 waves
    down).

    ---


    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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