ForexPros Daily Analysis April 27, 2010
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Fundamental Analysis: RBNZ Rate Statement
New Zealand traders anticipate the Reserve Bank’s rate statement publication. It is the primary tool the central bank uses to communicate with investors about monetary policy.Scheduled 8 times annually, it details the outcome of committee's vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced the members' votes.If the statement is more hawkish than expected, that is usually good for NZD.
Although the Euro has touched the 1.34 areas, it did not hold above 1.3387, even after trying twice, it went back to fall in both cases. And although it reached 1.3414, the issue for today is still 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 1.3337. 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.
Support:• 1.3337: Fibonacci 61.8% for the short term.• 1.3204: important intraday support, very close to last week’s, and one-year low.• 1.3113: Mar 30th 2009 low.
Resistance:• 1.3387: 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.
The Dollar-Yen retreated from this week’s top 94.34 back to 93.72, pips above the important resistance which was broken on Friday 93.62. 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 rise, which is a rise that should go through the 94.18 gate, the most important intraday resistance. 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.
Support:• 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.
Resistance:• 94.18: the falling trend line from this week’s top 94.34 on the intraday charts.• 95.05: Aug 24th high.• 95.90: Jul 29th low.
Forex Trading Analysis written by Munther Marji for ForexPros.
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