ForexPros Daily Analysis February 15, 2010
Free webinar on ForexPros - Mapping Out the Banking System & Foreign Exchange Dealing Process, Part II.
Expert: Dan Cook
When: Wed, Feb 24, 2010, 11:00 EST
In the second installment of the Webinar ‘Mapping Out the Banking System & Foreign Exchange Dealing Process’, Dan Cook will take a deeper dive into the Foreign Exchange Market. Cook will start by discussing the interbank system and how it differs in form and functionality to the centralized exchange models used for trading stocks and commodities. From there, he will focus on broker-level dealing and discuss how retail brokers, whether ECN's or Dealing Desk models, make money.
Cook will also take an inside look at dealing desks and speak frankly about the roles and responsibilities of a retail dealing desk, which will include an overview of how brokers hedge currency exposure. The goal of this Webinar is to help traders understand the nuances of the Forex market by shedding light on many of the aspects of currency trading that have previously been shrouded in mystery.
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Fundamental Analysis: German ZEW Economic Sentiment
European traders look forward to the publication of the German ZEW Economic Sentiment tomorrow, February 15. The German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment determines the sentiment of German institutional investors. Above 0 indicates optimism while below 0 indicates pessimism.
It's a leading indicator of business conditions. The reading is concluded from survey of about 350 German institutional investors and analysts.
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 decline from the past reading to a reading of 42.50.
The Euro broke the support 1.3662 and fell strongly as we expected, reaching the first suggested target 1.3582 successfully, and stopping only 5 pips before the second target 1.3525, Which confirmed a continuation of the downtrend, and an inability of using any chance to create a notable correction. And today, the continuation of the trend is expected, as we are still trading below the falling trend line that is drawn on the attached chart. Short term support is are 1.3572 and breaking it would indicate that we have lived a short correction after Friday’s fall, and we are to continue falling today, targeting 1.3525 & 1.3422. But in case of breaking the resistance 1.3675, the odds of a short term uprising correction will be greater, and the ideal targets of such a correction are the Fibonacci levels 1.3778 & 1.3836. In case we get close to these areas, the resistance at 1.3836 will be important not just for the short term, but for the medium term as well.
• 1.3572: Apr 6th high.
• 1.3525: May 14th low.
• 1.3422: important line on intraday charts.
• 1.3675: last Wednesday’s low.
• 1.3778: Fibonacci 50% for the last drop from 1.4025.
• 1.3836: Fibonacci 61.8% for the last drop from 1.4025.
For another day, Dollar-Yen frustrated our hopes for a big move, and stayed another day trading in very tight ranges, and very boring ones! We have not had our major move until now. But this very limited activity should come to an end soon, and a trend will be born, which will bring back some excitement to this pair, after a very boring week. Thus, we will await a break of the support or resistance of the day, and in case we get one, we expect to see a sizeable move in the direction of the break. Our eyes will be on the support 89.83, and breaking it would enhance chances of a drop in the first of this week, targeting 89.22, and then the all important Fibonacci medium & long term support 88.23. The resistance is at 90.22, and breaking it would target 91.14, and then what could be the most important resistance for short term 91.76.
• 89.83: the rising trend line from 88.53 on hourly charts.
• 89.22: last Friday’s low.
• 88.23: Fibonacci 61.8% for the whole move from 84.81 to 93.75.
• 90.22: Fibonacci 61.8% for the drop from 91.26 to 88.53.
• 91.14: Fibonacci 50% for the whole drop from 93.75.
• 91.76: Fibonacci 61.8% for the whole drop from 93.75.
Forex Trading Analysis written by Munther Marji for ForexPros.
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