ForexPros Daily Analysis March 8, 2010


Free webinar on ForexPros - Using Chart Patterns to Recognize Trends in the Market

Expert: Anthony Cherniawski
When: Mon, Mar 15, 2010, 11:00 EST

This session will discuss the proprietary cycles studies with other patterning devices and techniques to enhance the accuracy of cycle projections and trades. This multi-disciplinary approach may help improve the outcome of trading decisions for beginning and even experienced traders. The use of chart patterns, Elliott Wave, trend lines and even Japanese Candlesticks provide a means of raising the probability of success in trading the markets. 

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Fundamental Analysis: GBP - Trade Balance

European traders anticipate the publication of the Trade Balance index. The index measures the difference in worth between exported and imported goods (exports minus imports). This is the largest component of a country's balance of payments. Export data can give reflection on the UK growth. Imports provide an indication of domestic demand. Because foreigners must buy the domestic currency to pay for the nation's exports, it may have sizable affect on the GBP. 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 -7.00B.

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Euro Dollar

The Euro is approaching 1.37 as these words are written, and it has topped Fibonacci 76.4% for the short term (1.3686) with very few points, before retreating marginally to 1.3667. We have attached a chart with a suggested wave count, in which there is a set of 5 clear waves, with all the Elliott rules respected within this set. Thus, as long as the Euro is below the point which started this set, we assure the downtrend is in control, and we assume that the rise from 1.3529 on Friday which is approaching 1.37 now, is only a corrective one. The resistance 1.3686 will be resistance of the day. If this level is broken, the Euro will jump to .3769 & may be 1.3838 as well. If the price starts to go above 1.37, it is important to keep an eye on 1.3734, because this top has a lot of “Elliott” importance (since below it: downtrend, and above it: uptrend). As for the support it is at 1.3652, breaking it would target 1.3590, and Friday’s bottom 1.3529 which may be important.

Support:
• 1.3652: Fibonacci 38.2% for the short term.
• 1.3590: Fibonacci 61.8% for the short term.
• 1.3529: Friday’s low.

Resistance:
• 1.3686: Fibonacci 76.4% for the drop from 1.3734.
• 1.3769: the top of the falling channel on the hourly charts, and a very important resistance for the short term & the medium term.
• 1.3838: Feb 9th high.

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USD/JPY

Dollar-Yen broke the resistance specified in Friday’s report 89.46, and moved exactly as expected, targeting Fibonacci levels, and reaching both suggested targets 90.22 & 90.67 successfully & accurately (today’s high so far is 90.66. Fibonacci resistance 90.60 will be the most important for today, especially after the price has reached it & came back down to the Asian session low. The next few hours will be a match between a very sharp rising correction & a Fibonacci retracement level determined to stop it. If this resistance is broken, the correction will go on and will target 91.18 & the important 91.67.

Support:
• 90.29: hourly support.
• 89.69: Fibonacci 38.2% for the short term.
• 89.09: Fibonacci 61.8% for the short term.

Resistance:
• 90.60: Fibonacci 61.8% for the drop from 92.31.
• 91.18: hourly resistance.
• 91.67: previous hourly support.

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Forex Trading Analysis written by Munther Marji for ForexPros.

For information on US dollar index see ForexPros.

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Disclaimer
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