ForexPros Daily Analysis April 26, 2010
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Fundamental Analysis: Fed Chairman Bernanke
Traders of the US look forward to Fed Chairman Bernanke who will be testifying in Washington DC, regarding America's economic outlook and financial markets.
His comments may determine a short-term positive or negative trend.
The Euro broke the resistance specified in Friday’s report 1.3300, and created what we considered a “surprise” with this break, then it successfully reached the first suggested target for this break 1.3387. Our target has turned into today’s resistance, since it managed to stop the rise from 1.3200 ( Friday’s high was 1.3398 ) . The issue for today is whether Fibonacci 38.2% will continue to hold in front of this strong climb which achieved almost 200 pips in less than 24 hours, or will it give way to more gains? The first scenario, which we slightly prefer is for Fibonacci to hold, and for the price to start drifting away from it, and finally to break short term support 1.3334. IF this level is broken, the drop will be hard, and will target approaching last week’s low, and the lowest level since Apr 30th 2009 which was 1.3200, since we notice an important intraday support at 1.3204. IF we fall further, 1.3113 will be the next station. The second scenario is for the price to break Fibonacci resistance 1.3387, and if this happens, the price will jump to 1.3445, and then to the most important Fibonacci level 1.3503. We still see this at the maximum, the upper limit, for the EURUSD at this stage, breaking this resistance will be a huge surprise to us.
• 1.3334: Asian session low.
• 1.3204: important intraday support, very close to last week’s, and one-year low.
• 1.3113: Mar 30th 2009 low.
• 1.3387: the top of the falling channel on the hourly chart, and Fibonacci 38.2% for the whole drop from 1.3690.
• 1.3445: Fibonacci 50% for the whole drop from 1.3690.
• 1.3503: Fibonacci 61.8% for the whole drop from 1.3690.
Finally, Dollar-Yen broke the resistance which we focused all our attention all through last week 93.62, and successfully reached the first suggested target 94.24. With the break of this important resistance, after days of waiting, it immediately turned into the most important support. It is crucial for the Dollar to preserve gains and hold above this support/resistance in order to achieve more gains. If we hold above it, the price will have another chance to attack the resistance 94.30. If this one is also broken, we will reach the 95 areas for the first time since August, since the targets for such a break are 95.05 & 95.90. But if the price goes back to trade under 93.62, it will go back to its favorite hobby of breaking & retreating. The targets for such a retreat will be the very important 92.56, which is provided by the rising trend line from 88.12. Breaking this line will see us fall to 91.89.
• 93.62: the previous important resistance, and the rising trend line from Apr 19th bottom on intraday charts.
• 92.56: the rising trend line from 88.12 on hourly chart.
• 91.89: last Friday’s low.
• 94.30: important intraday bottom.
• 95.05: Aug 24th high.
• 95.90: Jul 29th low.
Forex Trading Analysis written by Munther Marji for ForexPros.
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