Forexpros Daily Analysis February 1, 2010
Free webinar on ForexPros - Identifying Low Risk, High Reward, and High Probability Trading Opportunities For Swing and Longer Term Forex Traders.
Expert: Sam Seiden
When: Thursday, Feb 4, 2010, 11:00 EST
During this session, we will apply what we learned during session one to the world of swing and longer term trading in the Forex markets. We will walk through the trade selection process, applying our rule based strategy to identify price levels where demand and supply are out of balance and where profit margins are large offering us significant risk/reward opportunities for Forex swing and position trading.
This webinar is the last of a three part series brought to you by Online Trading Academy and Forexpros.
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Fundamental Analysis: Halifax House Price Index
Traders of the UK await the publication of the Halifax House Price Index.
Change in the house and property prices financed by Halifax Bank Of Scotland (HBOS), one of the largest UK mortgage lender. This report helps to analyze the strength of the UK housing market, which helps to analysis the economy as a whole.
A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.
Analysts predict a reading of 0.90%, down from the previous 1.00%.
Friday’s report shined as the price stopped only 6 pips before the resistance specified in the report, and then started falling, breaking the support 1.3936 and successfully reaching the first suggested target 1.3888. But we have not tested the important 1.3824. Looking at the hourly chart, we can see that the Euro, and before breaking 1.4014 last week, has stopped at the falling trend line from 1.4554 for a third time, which makes this line one that deserves attention. The downtrend from 1.4577 will be dominant as long as we are below this line, which is currently at 1.3959, that’s why this will be resistance of the day. While the support is at short term Fibonacci 1.3867, and breaking either of these levels will set the direction for today. Breaking resistance 1.3959 will initiate a correction for the whole drop from 1.4577, targeting 1.4068 first, then ideal targets start at 1.4139. On the other hand, breaking support at 1.3867 means that we will test the important 1.3824, and if broken, targets starts at 1.3747.
• 1.3867: short term 61.8% Fibonacci support.
• 1.3824: Dec 19th 2008 important low.
• 1.3747: Jun 16th low.
• 1.3959: the falling trend line from 1.4554 on the hourly chart.
• 1.4068: Fibonacci 61.8% for the last drop from 1.4192.
• 1.4139: Fibonacci 38.2% for the whole drop from 1.4577.
Dollar-Yen broke the resistance specified in Friday’s report 90.41, but stopped in the middle of the road to the suggested target, at 90.90. This indicates that the bounce we talked about still has the momentum needed to go on. This fine bounce may manage to capitalize on the break of 90.41 to go higher. If the Dollar is meant to achieve more gains from this bounce, it is preferred that we do not break support at 89.94. And between 90.36 & 89.94, we will await a break of either of them to set the direction for the short term. If we test the falling trend line and break the resistance 90.36, the price will already be in a correction for the whole drop from 93.75, with ideal targets at 91.44 & 91.98. In case of a break of the support 89.94, we will target 89.12, and if broken we will be going back to the same trend line that provided last week’s support, which is currently at 88.60.
• 89.94: the rising trend line from Wednesday’s low.
• 89.12: Jan 27th low.
• 88.30: the support of the falling trend line from 90.58.
• 90.36: important intraday top.
• 91.44: Fibonacci 50% for the whole drop from 93.75.
• 91.98: Fibonacci 61.8% for the whole drop from 93.75.
Forex trading analysis by Munther Marji for Forexpros.
For information on currency trading see Forexpros.
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