ForexPros Daily Analysis April 15, 2010
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Fundamental Analysis: Building Permits
Traders of the US anticipate the publication of the Building Permits. It shows the number of permits for new construction projects issued by the government. Building permits are key indicator for the condition of the housing market. 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 0.63M.
The Euro tested the resistance we described as “important” 1.3675 with amazing accuracy, as yesterday’s high was 1.3677. We still believe that 1.3675 is the key that can open the way for more gains. And still, the “fight” between this advancement and this resistance will be the deciding factor which will determine the direction that we will take from these levels. If the price manages to break the resistance, the rise will go on and get stronger as we see it targeting the important 1.3776 & if broken we will not be surprised to see 1.3861. The support is at 1.3625, and breaking it would mean that we are on the way to test Tuesday’s low 1.3544 once again, and then head towards a very important support, provided by the 61.8% Fibonacci level for the whole rise from 1.3281, which is at 1.3437. In case we reach this level or come close to it, it will be a critical level not only for the short term but for the medium term as well. It is worth noticing that the EURUSD has not filled the gap or “closed the window”, and thus, the possibility of downside activity remains there.
• 1.3625: the rising trend line from 1.3281 on the hourly chart..
• 1.3544: Tuesday’s low.
• 1.3437: Fibonacci 61.8% for the rise from 1.3281.
• 1.3675: short term Fibonacci 61.8%, the resistance that stopped yesterday’s rise.
• 1.3776: Mar 15th high.
• 1.3861: Jan 29th low.
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. But, we now have a very important support which combines Fibonacci 50% with the rising trend line from 88.12. This all important support is at 92.26 and in case it is broken, the price will continue its drop from 94.77 (the correction), and will target the most important support for the short term (and may be the medium term as well) 91.66, and if broken we will target 91.07 as a modest target for such a break on the way to lower targets. As for the resistance, we raised it to 93.61, and breaking it would indicate that we are back to the 94areas after completing a modest correction, and we will target 94.24 & 95.05.
• 92.26: Fibonacci 50% for the rise from 89.74, and the rising trend line from 88.12 on the 4-hour chart, a very important support for both, short & medium terms.
• 91.66: Fibonacci 61.8% for the rise from 89.74.
• 91.07: Mar 12th high.
• 93.61: an intraday resistance which stopped the price several times.
• 94.24: Apr 7th high.
• 95.05: Aug 24th high.
Forex Trading Analysis written by Munther Marji for ForexPros.
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