ForexPros Daily Analysis March 11, 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: Retail Sales
Traders of the US anticipate the publication of the Retail Sales. The Retail Sales is a monthly measurement of all goods sold by retailers based on a sampling of retail stores of different types and sizes in the US. It is an important indicator of consumer spending and also correlated to consumer confidence and considered as a pace indicator of the US economy .
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 -0.10%.
The Euro confirmed it is building the triangle that we suggested yesterday, after it dropped only pips below the lower triangle line, and then it bounced back and rose until it touched the upper line in a very accurate fashion (please refer to the attached chart). The price is still trading within the triangle exactly as it was suggested yesterday, waiting for a real and decisive break for one of its limits. These limits have narrowed towards 1.3658 & 1.3581. We can only hope to end this boredom with a break of one of these levels. If the resistance at 1.3658 is broken, we expect the Euro to jump and test the last week’s at 1.3734. And if this important resistance is broken too, we will see the Euro flying to 1.3861. On the other hand, if the support at 1.3581 is broken, we expect a test of the rising trend line from 1.3442 as a first target (this line is currently running at 1.3477), and if broken we will reach a fresh cycle low at 1.3379.
• 1.3581: the lower limit of the triangle formation.
• 1.3477: the rising trend line from 1.3442 on the hourly charts.
• 1.3379: Apr 14th high.
• 1.3658: the upper limit of the triangle formation.
• 1.3734: Mar 3rd top.
• 1.3861: Jan 26th low.
The Dollar-Yen kept trading above the important support 89.69 all through the past 24 hours, and it rose breaking the resistance 90.26, and as we expected reached a new weekly high at 90.80, only 4 pips below our suggested target. With this obvious penetration of 90.60, the Dollar is in a good position to achieve more gains, since the technical plea in favor of the Yen (which is stopping accurately at a Fibonacci resistance level) is no longer there. This advancement which reached 90.80 so far, is invited to hold above short term support 90.06, in order to achieve more gains. The resistance is at 90.60, and if broken, USDJPY will jump strongly, targeting 91.60, and then 92.31. IF the support is the level which will give way, this would be an indication that yesterday’s rise has shown all that it could, and the pair will slip again towards 89.33, and may be the important bottom 88.53.
• 90.06: Fibonacci 61.8% for the short term.
• 89.33: Jan 26th low.
• 88.53: Feb 4th important bottom.
• 90.60: Fibonacci 61.8% for the drop from 92.13.
• 91.60: Oct 29th high.
• 92.31: Oct 26th high.
Forex Trading Analysis written by Munther Marji for ForexPros.
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