ForexPros Daily Analysis February 16, 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: FOMC Meeting Minutes
Traders of the US anticipate the publication of the Federal Open Market Committee (FOMC) Meeting Minutes. They are a detailed record of the committee's interest rate meeting held about two weeks earlier. The minutes provide detailed insights regarding the FOMC's stance on monetary policy, so currency traders carefully comb them for clues regarding future interest rate shifts.
The Euro did not break the resistance nor the support specified in yesterday’s report, and traded in a tight range for the past 24 hours. The resistance that is considered the upper limit for the downtrend is 1.3720, and as long as the price is below this level, we favor more downside activity, But the technical outlook changes dramatically the minute this level is broken. The continuation of the downtrend is expected, as we are still trading below the falling trend line drawn from 1.3838. Short term support is are 1.3616 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 1.3720, 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.
• 1.3616: the rising trend line from 1.3530 on intraday charts.
• 1.3525: May 14th low.
• 1.3422: May 18th low.
• 1.3720: the falling trend line from 1.3838 on intraday charts.
• 1.3778: Fibonacci 50% for the last drop from 1.4025.
• 1.3836: Fibonacci 61.8% for the last drop from 1.4025.
Yesterday, Dollar-Yen did not break the support or resistance specified in the report, but it did break 89.83 during the Asian session. This break holds a lot of importance for the short term, since it is a break for the hourly trend line rising from the important bottom 88.53. Thus we will await a break of the Asian session low 89.70 to confirm the break of this trend line, and breaking it would enhance chances of a drop in the coming hours, targeting 89.12, and then the all important Fibonacci medium & long term support 88.23. The resistance stays at 90.22, and the negative technical outlook will not change unless we decisively break this resistance. If this break happens, we would target the important Fibonacci levels 91.14, and then what could be the most important resistance for short term 91.76.
• 89.70: the rising trend line from 88.53 on hourly charts.
• 89.12: Jan 27th 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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