Forexpros Daily Analysis Nov 12, 2009

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The U.S Bureau of Economic Analysis will publish the monthly Trade Balance index tomorrow (Nov 13).

The Index measures the difference in worth between exported and imported goods (exports minus imports), which make up the largest component of a country's balance of payments.

Export data gives reflection on the US growth, while imports provide an indication of domestic demand.

The index serves as a powerful indicator for the streangth of the USD, because foreigners must buy the domestic currency to pay for the nation's exports.

Analysts forecast tomorrow's index to stand at -32.00B, a drop from lasts month's reading of -30.70B.

More fundamental analysis at Forexpros.


Euro Dollar

The Euro fluctuated in a tight range, breaking both the support & resistance specified in yesterday's report, without reaching the target in either cases, and without any large moves to follow the breaks. Short-term support is still at 1.4975 where there is the moving average SMA100, and the previous support. If broken, the Euro will probably fall today in a correction for the last move up from 1.4625, targeting 1.4886 & 1.4836 and may be the most important support for medium-term currently at 1.4786. In this case, the later will become a crucial support, for setting the direction for the next few days, because breaking it would indicate that the drop from 1.5047 is not just a correction. Such a break would harm the technical outlook not just for the short-term but for the medium-term as well. The most important resistance is 1.5018, and breaking it would give the Euro a push to areas above yesterdays high, and we could finally see 1.51.

• 1.4975: the moving average SMA100 and a previous support.
• 1.4886: Fibonacci 38.2% for the last rising move.
• 1.4836: Fibonacci 50% for the last rising move.

• 1.5018: Monday's & Tuesday's high.
• 1.5082: previous resistan4ce from 2008.
• 1.5144: previous support from 2008.

For the past 24 hours, the Dollar-yen did not break any of the levels specified in yesterday's report, it did not penetrate 90.23, it did not drop below 89.53. The most important thing to happen from a technical point of view was the fact that the falling trendline and the rising broken trendline came closer to each other. The most important resistance is provided by the falling trendline from October 27th top, which is currently at 90.00. The bears will be in control as long as price is below this line that provides today's most important resistance. And if this happens, we expect the price to fall and test Fibonacci 61.8% support for the short-term at 89.56, and may be a break as well, that will lead to the important bottom 88.82. If the opposite of what we expect happens, and we break the resistance 90.00, the price will be on its way to 90.90 first, and may be 91.31 later.

• 89.56: Fibonacci 61.8% for the short-term.
• 88.82: Oct 14th low, and an important low for determining the medium-term trend.
• 88.33: previous support.

• 90.00: the falling trendline from Oct 27th high.
• 90.90: a well known previous support/resistance.
• 91.31: Nov 4th high.
Analysis by Forexpros - Written by Munther Marji
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