Forexpros Daily Analysis March 18, 2010
Free webinar on ForexPros - Identifying Low Risk, High Reward, and High Probability Trading Opportunities For Swing and Longer Term Forex Traders.
Expert: Sam Seiden
When: Today, Mar 18, 2010, 10:00 EST
During this session, we will apply what we learned during session one to the world of swing and longer term trading in the Forex markets. We will walk through the trade selection process, applying our rule based strategy to identify price levels where demand and supply are out of balance and where profit margins are large offering us significant risk/reward opportunities for Forex swing and position trading.
This webinar is the last of a three part series brought to you by Online Trading Academy and Forexpros.
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Fundamental Analysis: Core Retail Sales
Canadian traders await the publication of the Core Retail Sales.
The Core Retail Sales is a monthly measurement of all goods sold by retailers based on a sampling of retail stores of different types and sizes in Canada, excluding auto. It is an important indicator of consumer spending and also correlated to consumer confidence and considered as a pace indicator of the Canadian economy .
A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD. Analysts predict a reading of 0.50%, up from the previous 0.40%.
The Euro’s rally halted just above 1.38, and fell back fast & strong. As we can see from the attached chart, the Euro fell towards a very important support which is the lower trend line in the triangle that we talked about in the past few days. And as we can see on the chart as well, the price has already touched this line as well. Holding above, or breaking this line is the single thing that will determine the direction of the day. Thus 1.3665 is the most important support, if the Euro continues its fall and breaks it, huge implication for the short & medium term will arise! The most important of which is that the chances to drop to a new bottom in this cycle, below the 9-month low 1.3434 will be huge. As for the short term, if 1.3665 is broken, we will see the price fall to 1.3550, and may be towards 1.3442 as well. But if the price holds above 1.3665, it will rise to challenge the resistance 1.3710. And if this level is broken, we expect a strong jump towards yesterday’s high 1.3816, and then it will try to reach 1.39.
• 1.3665: the rising trend line from 1.3434, and the lower line in the triangle formation.
• 1.3550: March 4th low.
• 1.3442: Feb 19th low.
• 1.3710: the falling trend line from yesterday’s high on intraday charts.
• 1.3816: yesterday’s high.
• 1.3901: Feb 4th high.
It seems as if the Dollar-Yen is trapped! And that it is stuck between the two limits we talked about in yesterday’s report, since we have not seen a break of either of them, as the price continued to trade marginally. Yesterday, we adjusted the lines that frame the current area, to make the upper limit at Monday’s top 90.78, which is very close to last Wednesday’s top 90.80. The lower limit is provided by the rising trend line from 89.61 on the hourly chart, which has been tested several times so far. We will adopt the support just below this line at 90.04 as short term support In case we broke the resistance 90.78 we will see the Dollar take control, and drive this pair higher, as we see it targeting the important 91.60 first, then 92.31 which is important as well. But in case we broke the rising trend line at 90.04, the price will start to fall, confirming the negative technical outlook which came after Friday’s price behaviour. This fall is expected to target 89.37 & 88.53. But before breaking any of these 2 important limits, the technical outlook will be mixed.
• 90.04: important support just below the rising trend line from 89.61 on the hourly chart.
• 89.37: Mar 2nd low
• 88.53: Feb 4th low.
• 90.78: Monday’s high.
• 91.60: Oct 29th high.
• 92.31: Oct 27th high.
Forex trading analysis by Munther Marji for forexpros.com.
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