Forexpros.com Daily Analysis - 10/03/2010

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

Expert: Anthony CherniawskiWhen: Mon, Mar 15, 2010, 11:00 EST

This session will discuss the proprietary cycles studies with otherpatterning devices and techniques to enhance the accuracy of cycleprojections and trades. This multi-disciplinary approach may help improvethe outcome of trading decisions for beginning and even experienced traders.The use of chart patterns, Elliott Wave, trend lines and even JapaneseCandlesticks provide a means of raising the probability of success intrading the markets.

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Fundamental Analysis: Trade Balance

Traders of the US anticipate the publication of the Trade Balance index. Theindex measures the difference in worth between exported and imported goods(exports minus imports). This is the largest component of a country'sbalance of payments.Export data can give reflection on the US growth. Imports provide anindication of domestic demand.Because foreigners must buy the domestic currency to pay for the nation'sexports, it may have sizable affect on the USD.A higher than expected reading should be taken as positive/bullish for theUSD, while a lower than expected reading should be taken as negative/bearishfor the USD. Analysts predict a reading of -41.00B.

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Euro Dollar

The Euro broke the support 1.3595, and stopped only 7 pips below thesuggested target, and created another bottom in the same area of lastFriday's low (1.3529). This boring behavior, and moving back and forth inalmost the same areas in the past days, made us wonder if we could be in atriangle of some sort. If this is true, the triangle limits are 1.3673 &1.3557, but we will espouse Fibonacci 61.8% support & resistance at 1.3566 &1.3639 to be today's levels. We can only hope to end this boredom with abreak of one of these levels. If the resistance at 1.3639 is broken, weexpect the Euro to jump and test the top of the falling channel at 1.3729.And if this important resistance is broken too, we will see the Euro flyingto 1.3810. On the other hand, if the support at 1.3566 is broken, we expecta test of the rising trend line from 1.3442 as a first target (this line iscurrently running at 1.3472), and if broken we will reach a fresh cycle lowat 1.3390.

Support:* 1.3566: Fibonacci 61.8% for the short term.* 1.3472: the rising trend line from 1.3442 on the hourly charts.* 1.3390: Apr 13th high.

Resistance:* 1.3639: Fibonacci 61.8% for the short term.* 1.3729: the top of the falling channel on the hourly charts, and a veryimportant resistance for the short term & the medium term.* 1.3810: Feb 10th high.

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USD/JPY

After Fibonacci resistance 90.66 has succeeded in reversing the short termdirection, the price traded under it for the whole past 24 hours, reaching alow of 89.61, and drifting away more than 100 pips from the weekly high,which is in total agreement with Fibonacci analysis that suggests we had ashort term direction-changing top at 90.66.This rebound from Fibonacciretracement level with very good accuracy is evidence that the generaldirection of the short-term is down. If this turns out to be true, we willsee the Dollar-Yen breaking the nearby support 89.69, and trying to attackthe Fibonacci support 89.09 which will act as a first target for this break,and in case this level is broken, we can say that the drop from 90.66 ismore than a correction. If this level is also broken, the target would be88.46, on the way to lower targets. As for the resistance it is provided byshort term Fibonacci 61.8% resistance, at 90.26. If this line is broken, wewill be on the way to another weekly high, since the targets for such abreak would be 90.84 & the well known important resistance 91.67.

Support:* 89.69: Fibonacci 50% for the short term.* 89.09: Fibonacci 61.8% for the short term.* 88.46: previous hourly support.

Resistance:* 90.26: Fibonacci 61.8% for the drop from this week's high.* 90.84: Nov 5th & 6th high.* 91.67: previous hourly support.

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Forex Trading Analysis written by Munther Marji for ForexPros.

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