ForexPros Daily Analysis April 12, 2010
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Fundamental Analysis: Trade Balance
Traders of the US anticipate the publication of the Trade Balance index. It 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 US 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 USD. 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 future reading of -39.00B.
The Euro broke the resistance specified in Friday’s report 1.3374 and successfully reached the first suggested target 1.3489. But what is more important is the gaps which took place at the new week’s open, and managed to create a major technical event, which is breaking the medium term trend line, which is the line falling from 1.5139 on daily chart. This line, which we focused on all last week, is an important one, which managed to frustrate the Euro’s attempts to rise for the past 3 months, and now it gives way, how much will that has an effect on the EURUSD? We can say that the Euro is finally free from downside pressure on the medium term, and that it will be shooting for areas hundreds of pips higher than current ones, in the next few days and weeks. But there is an important condition for this, and that is to keep trading above the broken line. As for the short term, the resistance is at 1.3709, and breaking it would indicate a continuation in this rising move. The next set of targets will be 1.3794 then 1.3861. As for the support, it is at 1.3648, and breaking it would indicate a correction for the whole move up from 1.3281, with the ideal target-area for this correction between 1.3534 & 1.3437.
• 1.3648: the rising trend line from the after-open low.
• 1.3534: Fibonacci 38.2% for the rise from 1.3281.
• 1.3437: Fibonacci 61.8% for the rise from 1.3281.
• 1.3709: Fibonacci 23.6% for the whole drop from 1.5143 to 1.3266.
• 1.3794: Mar 12th high.
• 1.3861: Jan 29th low.
The Dollar-Yen refused to engage in the extreme excitement seen on the Dollar/European currencies pairs, and kept its very calm relatively to the craziness we have seen on other pairs. The thing is that, the technical outlook has not changed for days. We are still trading very slowly in a correction to the up move which topped at 94.77, which is a correction that managed to reach its first target at 92.85. We are still watching for any other technical evidences to decide whether this correction has finished at Fibonacci 38.2% or that it is still going and will soon target Fibonacci 50% & 61.8% levels. Support is at 92.85 and in case it is broken, the price will continue its drop from 94.77 (the correction), and will target 92.10 first, then the most important support for the short term (and may be the medium term as well) 91.66. As for the resistance it is at 93.42, and breaking it would indicate that we are back to the 94areas after completing a modest correction, and we will target 94.07 & 95.05.
• 92.85: Jan 8th high, and the rising trend line from 88.12 on the 4-hour chart.
• 92.10: Mar 30th low.
• 91.66: Fibonacci 61.8% for the rise from 89.74, a very important support for the short term.
• 93.42: the falling trend line from 94.77 on hourly chart.
• 94.07: important intraday support/resistance.
• 95.05: Aug 24th high.
Forex Trading Analysis written by Munther Marji for ForexPros.
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