Forexpros Daily Analysis Nov 2, 2009
Free webinar - Pivot Points: Essential for Forex Trading
Expert: Chris Capre
When: Wed, Nov 4, 2009, 17:00 EST
One of the most challenging subjects for traders is finding their entries and exits.
If you are a day trader, you will not want to miss this webinar as we will talk about pivot points, what are the best way to use them, why they are so crucial, and how to make sense of the market.
If you want more efficient entries, exits and to get access to proprietary pivot point data, then you will want to tune into this webinar.
UK traders await the release of the Nationwide Consumer Confidence report tomorrow (Oct 3rd).
The report is calculated from a survey of about 1,000 consumers, and 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.
A higher than expected reading should be taken as positive/bullish for the GBP since it points to consumer optimism, while a lower than expected reading should be taken as negative/bearish for the GBP.
Analysts forecast an increase on last’s month’s figure of 71.00 to 72.00.
The Euro broke the short-term resistance 1.4737, and reached the first target suggested for this break at 1.4827 successfully. The most important question for now is this: Is the current rise a corrective or impulsive move? We believe that the limit separating those two possibilities is 1.4916, which is Fibonacci 61.8% for the drop from 1.5061. And as long as the Euro stays below this resistance it is considered a corrective rise, while breaking it would announce more upside movement to come, probably to reach new highs above the last top 1.5061. The first resistance in front of us is 1.4872, and if it is broken we will head towards the important test of 1.4916, and if this one is broken we will target 1.4980 first, on the way to higher targets. Short-term support is provided by the rising trendline from Wednesday's low, currently at 1.4786, and if broken we will test 1.4702 again, and if this one is broken we will head towards 1.4649.
• 1.4786: the rising trendline from Wednesday's low on the intraday & hourly charts.
• 1.4702: Fibonacci 61.8% for the whole move from 1.4480.
• 1.4649: Oct 7th low.
• 1.4872: Fibonacci 50% for the drop 1.5061.
• 1.4916: Fibonacci 61.8% for the drop 1.5061.
• 1.4980: Oct 26th low.
As we have expected in Friday's report, Dollar-Yen broke the support 90.75 and reached both suggested targets 90.16 & 89.61 successfully. This drop that started on Thursday and continued into the new week, was the result of stopping near Fibonacci 61.8% resistance at 9.52, and as you know, stopping near Fibonacci resistance levels is an evidence that the trend in down. But on the other hand, the abovementioned drop cashed in 250 pips approximately, which could create a correction from here. That is why we prefer to wait for a break of short-term support 89.61 or short-term resistance 90.23 before talking about the direction of the next move from here. If we break the support 89.61 the downtrend will continue, and will target 89.07 and the important 88.64. And if we break Thursday's low 90.23, we will be heading to a test of short-term Fibonacci 61.8% at 90.68, and only if it is broken, we will expect a retest of the broken channel at 91.28, which would be an important test if it happens.
• 89.61: previous support & Oct 12th low.
• 89.07: previous intraday support.
• 88.64: Oct 9th low.
• 90.23: Oct 29th low.
• 90.68: Fibonacci 61.8% for the short-term, important resistance.
• 91.28: the retest level of the broken channel.
Forex trading analysis by Forexpros – Written by Munther Marji
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