Forexpros Daily Analysis Oct 15, 2009
Free webinar - Spotting behavioral and fundamental clues in the market to catch giant price moves

Expert: Kris Matthews
When: Sun, Nov 1, 2009, 10:00 EST

Traders often forget that the market is made up of human beings, rather than price patterns and news events. Your edge in the market (and in any zero-sum-game) is knowing something about the other players' positions.

To profit from the currency market you must understand that there are three groups of players in the currency market and each has particular motives, limitations, and behaviors. Identifying the clues that each of these groups leave behind in a systematic manner will position you to capture the large macro moves in the forex market.[/color]

Click here to join the webinar.

Tomorrow (Oct 15) The US Treasury Department will publish the monthly Treasury International Capital (TIC) Net Long-Term Transactions Report.

The report measures the monthly difference in value between US purchases of long-term foreign securities and foreign purchases of US long-term securities.
The TIC flows is a key resource of the US government for offsetting the Trade Deficit. It can give a good reflection on demand for 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 last month's measurement of 15.30B to fall to 11.00B.

---

Euro Dollar

As expected, the Euro continued its rise, but until this very moment did not reach our target of 1.50. By taking a look at the two drawn channels, we see that they unite just above 1.50, which gives this area a lot of importance. And we assume very reasonably that this area is one of the best candidates to change short-term direction. Thus we must keep an open eye towards any reversal signals that could appear here. On the other hand, if it is broken, we will get closer to 1.51, since we see the next stop as 1.5082, on the way to higher prices. The short-term support now is the nearby 1.4933, a break would signal that a correction of some kind has started. And if this is the case, what will be expected is a correction for the move up from 1.4672 (at least), which is expected to drop the price back to the important 1.4782 first (Fibonacci 61.8% for the short-term, plus the rising trendline from 1.4480 on the intraday charts), and if broken, we can expect more drop.

Support:
• 1.4933: short-term support.
• 1.4849: Fibonacci 38.2% for the short-term.
• 1.4782: Fibonacci 61.8% for the short-term, plus the rising trendline from 1.4480 on the intraday charts.

Resistance:
• 1.4962: previous daily high.
• 1.5011: the top of the rising channel on the hourly chart.
• 1.5082: previous daily high.

---

USD/JPY

Price could neither break the resistance 90.27, nor the support 88.96 (which was exactly the lowest price after the issuance of the report), and that is why we spent the whole day in a very tight range. What is worth notice this morning, that the falling trendline from 90.44 on the hourly chart, has many touch points with the price. And we will adopt it as resistance of the day. Breaking it would give the chance to test another slightly more important line which is the falling trendline from 95.05, currently at 90.29, and if it is broken, then the Dollar would be invited to show how deep its real strength is over a series of resistance areas starting at 90.67 and reaches 91.63. breaking 90.29 means that the line is broken, and the next stop would be 90.67 which is an important stop on the way to the most important stop in these areas 91.63. As for the support, it will stay as it was in yesterday's report 88.96, and if broken the direction would be down to test the important support 88.68, which must hold to prevent another attempt to test 87.97 which survived last week's attempt for a break.

Support:
• 88.96: short-term support.
• 88.68: support area that supported the price twice this month.
• 87.97: Jan 23rd low.

Resistance:
• 89.64: the falling trendline on the hourly chart from 90.44
• 90.29: the falling trendline on the hourly chart from 95.05.
• 91.12: previous support & resistance area.

---

Forex trading analysis by Forexpros - Written by Munther T. Marji

---

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.