ForexPros Daily Analysis March 23, 2010
Free webinar on ForexPros - Inter-Market Analysis and 2010 Forecast for the Dollar and Commodities
Expert: Nour Eldeen M. Al-Hammouri
When: Thu, Mar 25, 2010, 15:00 GMT
In this webinar Nour Eldeen M. Al-Hammouri will discuss the Inter-Market Analysis and markets relationships. He will relate to the issue of how to use Moving Averages to track the best support and resistance area, which will be a signal for the Buy areas or Sell areas.
Click here to join free.
Fundamental Analysis: German Ifo Business Climate Index
European traders anticipate the publication of the German Information and Foschung (Ifo) Business Climate Index. The index determines the business sentiment and conditions in the Euro-zone.
The reading is concluded from survey of about 7,000 businesses. 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 future reading of 96.00.
The Euro broke the support specified in yesterday’s report 1.3501, only to stop in the middle of the way to the target 1.3422, at 1.3462 in specific. This is the fifth time that the EURUSD reaches a daily low in the same area, without being able to break it. In Addition to yesterday’s low, the Euro has bottomed in the neighborhood on: Feb 19th (low 1.3442), Feb 25th (low 1.3450), Mar 1st (low 1.3459) & Mar 2nd (low 1.3434). And after 3 weeks, we come back to the same area, as if we needed another bottom here to realize just how important this support area is. But, we were expecting to see a break of the wide and strong support area which concerned us for more than a month so far: 1.3434-1.3462. It is with no doubt that any attempts to reach 1.30 on the medium term will not have a good chance unless this support is broken. Short term analysis provides that the support is at 1.3502, and breaking it would give another chance to break the 1.34 areas. The targets for this break will be 1.3442 first, and then 1.3341. As for the resistance it is at 1.3566, and breaking it would mean we are already correcting the last drop from the 1.38 top, and the targets for this correction will be 1.3621 & 1.3696.
• 1.3502: Fibonacci 61.8% for the short term.
• 1.3422: May 18th low.
• 1.3341: May 8th low.
• 1.3566: Fibonacci 61.8% for the micro term.
• 1.3621: Fibonacci 38.2% for the short term.
• 1.3696: Fibonacci 61.8% for the short term.
The Dollar-Yen broke the rising trend line from 89.61, and the support specified in yesterday’s report 90.33, dropped to 89.81, without being able to go lower than Thursday’s low 89.74. This morning the price came back to test the broken trend line (please refer to the attached chart). But we believe, even if the price came back over the broken line, the technical outlook will not turn positive, since we are still below 90.78. Last week, we adjusted the lines that frame the current area, to make the upper limit at Monday’s & Thursday’s top 90.78, which is very close to last Wednesday’s top 90.80, and close to Friday’s top 90.70. In case we break the magnetic 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 break the nearby support 90.23, drifting away from 90.78 will actually start, and we will be on the way to target 89.37 & 88.53.
• 90.23: important intraday support.
• 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 written by Munther Marji for ForexPros.
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