Forexpros Daily Analysis February 2, 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: ADP Nonfarm Employment Change
Traders of the US await the publication of the ADP National Employment Report. The report measures the monthly change of nonfarm private employment, based on a subset of aggregated and anonymous payroll data that represents approximately 400,000 U.S. business clients. This release, 2 days before the government-released employment data , is a good predictive to the government's non-farm payrolls data. The change in this indicator can be very volatile.
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. Analysts predict a reading of -40.00%, up from the previous -84.00%.
After the issuance of the last report, the Euro did not break any of the levels specified in the report. 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. And now, we have yet another reason to pay attention to this line, which is the forth touch. The downtrend from 1.4577 will be dominant as long as we are below this line, which is currently at 1.3933, that’s why this will be resistance of the day. While the support is at short term Fibonacci 1.3885, and breaking either of these levels will set the direction for today. Breaking resistance 1.3933 will initiate a correction for the whole drop from 1.4577, targeting 1.4062 first, then ideal targets start at 1.4128. On the other hand, breaking support at 1.3885 means that we will test the important 1.3824, and if broken, targets start at 1.3747.
• 1.3885: important intraday low.
• 1.3824: Dec 19th 2008 important low.
• 1.3747: Jun 16th low.
• 1.3933: the falling trend line from 1.4554 on the hourly chart.
• 1.4062: Fibonacci 61.8% for the last drop from 1.4192.
• 1.4128: Fibonacci 38.2% for the whole drop from 1.4577.
Dollar-Yen broke the resistance specified in yesterday’s report 90.36, but stopped in the middle of the road to the suggested target, at 90.92. 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 90.36 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 90.30. And between 90.89 & 90.30, we will await a break of either of them to set the direction for the short term. If we break the resistance 90.89, 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 90.30, we will target 89.57 and if broken we will be going back to the same trend line that provided last week’s support, which is currently at 88.48.
• 90.30: the rising trend line from 89.20 on the hourly chart.
• 89.57: Jan 29th low.
• 88.48: the support of the falling trend line from 90.58.
• 90.89: 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.
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