ForexPros Daily Analysis April 6, 2010
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The signs of drifting away from 1.3606 started to appear clearly as we broke the rising channel on the hourly chart, which appears on today’s attached chart. This break took place at 1.3465, and after such a break it is only normal for the Euro to enter in a bearish phase, for the short term at least. But approaching 1.3606 then breaking a rising channel could mean that we are entering a bearish phase on the medium term as well. Short term support is at 1.3412, and if broken, the drop created upon the 1.3465 break will gain momentum, and will drag the Euro down to 1.3283 as a first target for this break, and then we could see 1.3190. As for the resistance, it is at the retest level for the broken channel, which is at 1.3480. If the Euro manages to go back inside the channel, that would be a real surprise, and if this surprise happens, that would give another chance to test the most important resistance of all 1.3606. And if this one is broken, the Euro will enter a bullish phase for the short & medium terms, and would target 1.3703 as a first immediate and modest target for such a break on the way to higher levels in the coming days. But, as long as we are below 1.3480, there will be no surprises, and the Euro will fall towards the above mentioned targets.
• 1.3412: Asian session low.
• 1.3283: last Thursday’s low.
• 1.3190: Apr 30th 2009 low.
• 1.3480: the retest level for the broken channel on the hourly chart.
• 1.3606: Fibonacci 61.8% for the drop from 1.3816.
• 1.3703: Mar 8th high.
The rising move for the Dollar against the yes stalled at 94.77 early in the new week. From that top a slow retreat has started, then a break of the rising channel on the hourly chart (shown on the attached chart). This is the most important even in favor of the Yen in the past 2 weeks. We expect this break to give a chance for the Yen to achieve gains and move this pair lower, even if that was for a correction. We can also see a falling trend line from 94.77, with which the price has touched 3 times so far. This is another sign that the short term trend is down (in addition to breaking the channel). Short term support is at 93.75, if broken the 94 adventure would have ended, even if temporary, and time for a correction will be here. Targets for this break would be the very important 93.12 & 92.10. As for the resistance it is at 94.28 & breaking it would target 95.05 & 95.94.
• 93.75: Jan 8th high.
• 92.84: Fibonacci 61.8% for the rise from 92.10, a very important support for the short term.
• 92.10: Mar 30th low.
• 94.28: the falling trend line from 94.77 on hourly chart.
• 95.05: Aug 24th high.
• 95.94: Mar 30th 2009 low.
Forex Trading Analysis written by Munther Marji for ForexPros.
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