Forexpros.com Daily Analysis - 11/05/2010

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Free webinar on ForexPros - Money Management for Forex & Futures

Expert: Mark Hodge, Rockwell TradingWhen: Wed, May 12, 2010, 10:00 EST

Money Management is one of the keys to becoming a consistent and self-sufficient trader.  But many traders are unaware of what money management really is and how it can have a dramatic effect on growing and protecting their trade equity. In this FREE webinar, Mark Hodge (Head Coach of Rockwell Trading) will cover the following important topics:

    * What money management is and what it isn't    * Share several different money management techniques    * Show why Fixed Ratio Money Management is his favorite

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Fundamental Analysis: German GDP

European traders anticipate the publication of the German GDP. The Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator for the economy's health. The quarterly percent changes in GDP shows the growth rate of the economy as a whole. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR. Analysts predict a future reading of 0.00%.

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Euro Dollar

The Euro broke the resistance specified in yesterday’s report 1.2966 and jumped more than 125 pips, and came close to our suggested target 1.3105 (yesterday’s high was 1.3092). Then it completely collapsed, dropping back to break the support 1.2900, and reaching the first suggested target 1.2795, it then came close to the second suggested target 1.2690 (the low until the moment of preparing this report is 1.2706). These big & massive moves give us a lot of excitement, but they also increase risk. They may stop just before their targets, and switch direction violently, like what we have seen yesterday just ahead of 1.3105. Thus, we all should stick to strict money management rules, in order to avoid potential hard hits that may occur to us. Today’s support is at 1.2706, it is the lowest point after yesterday’s top. If broken, we will target 1.2608, which is probably the last important level before last week’s and one-year low 1.2511. The resistance is at 1.2801, breaking it would target the important Fibonacci level 1.2899 then the most important Fibonacci level 1.2945.

Support:• 1.2706: Asian session low.• 1.2608: important intraday low.• 1.2511: last week’s & one-year low.

Resistance:• 1.2801: important intraday top.• 1.2899: Fibonacci 50% for the drop from 1.3092.• 1.2945: Fibonacci 61.8% for the drop from 1.3092.

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USD/JPY

The Dollar/Yen’s is back to slow, small, and boring moves! But it has reached a new top at 93.50, before going back below 93. Today’s important levels are close to each other. The resistance is at 93.15 & the support is at 92.57. We will be waiting for one of these two levels to give way. If 92.57 gives way, a correction for this rocking jump will start, with its first target at 91.40 and the second important target is at 90.75. The resistance is at 93.15, and if broken the price will jump to the resistance that we find very attractive 93.96. If this one is also broken, 95 will become near, as we will target 95.05. In the next few days, important evidence on medium term direction will emerge, and we will be on the watch for them.

Support:• 92.57: intraday support.• 91.40: Fibonacci 38.2% support for the rise from Thursday’s low.• 90.75: Fibonacci 50% support for the rise from Thursday’s low.

Resistance:• 93.15: the falling trend line from yesterday’s tops.• 93.96: previous hourly resistance.• 95.05: Aug 24th high.

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Forex Trading Analysis written by Munther Marji for ForexPros.

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