ForexPros Daily Analysis April 28, 2010
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Fundamental Analysis: Initial Jobless Claims
Traders of the US anticipate the publication of the Initial Jobless Claims. It is a seasonally adjusted measure of the number of people who file for unemployment benefits for the first time during the given week. This data is collected by the Department of Labor, and published as a weekly report. The number of jobless claims is used as a measure of the health of the job market, as a series of increases indicates that there are fewer people being hired. On a week-to-week basis, claims are quite volatile. Usually, a move of at least 35K in claims, is required to signal a meaningful change in job growth. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD. Analysts predict a future reading of 440.00K.
As expected, the scenario we slightly preferred is the one which happened, which we said yesterday that it includes the price to start drifting away from it, and break short term support 1.3337. The price broke the specified support in yesterday’s report 1.3337, and successfully reached the first suggested target 1.3204, and it came sort of close to the second suggested target 1.3113. Thus, there is no change on the technical outlook , we still believe that this downtrend is capable of breaking the 1.30 landmark, and go into the 1.20s for the first time in a year. But, after yesterday’s plunge we could see a rising correction, which should stay inside the channel drawn on the attached chart. That is why we will focus on short term levels for today, waiting for one of them to give us the direction for the next several hours. Short term support is at the nearby 1.3188, and breaking it would indicate a drop to 1.3113 first, then maybe we will see 1.3050. The resistance is at 1.3247, and breaking it would indicate we are already in a rising correction for yesterday’s drop, with the ideal target at 1.3310, and the maximum target at the channel’s top 1.3366. We see that it is very hard for the Euro to decisively break this resistance.
• 1.3188: the rising trend line from yesterday’s bottom on intraday charts.
• 1.3113: Mar 30th 2009 low.
• 1.3050: Apr 20th 2009 high.
• 1.3247: Fibonacci 38.2% for the last drop from 1.3414.
• 1.3310: Fibonacci 61.8% for the last drop from 1.3414.
• 1.3366: the top of the falling channel on hourly chart.
The Dollar-Yen continued to retreat from this week’s top 94.34 back to 93.72, breaking the important resistance which was broken on Friday 93.62, and dropping to 92.80, that’s 24 pips before our suggested target for this break. After rising back above 93, the resistance 93.33 showed some strength, stopping the price from going up 3 times. But there are more important levels to focus o. The support is at 93.01, breaking it means a continuation of the drop, and looking for targets below 92.80, we see the test of the rising trend line from 88.12 as the most notable target for this break. We have modified this trend line, and it is currently running at 92.29. A break here will immediately target 91.58. As for the resistance it is at 93.75, and breaking it would be a sort of surprise, which could spark a sharp climb to 95.05 & 95.90.
• 93.01: Fibonacci 61.8% for the short term.
• 92.29: the rising trend line from 88.12 on hourly chart, after it has been modified.
• 91.58: Apr 19th low.
• 93.75: Fibonacci 61.8% for the short term.
• 95.05: Aug 24th high.
• 95.90: Jul 29th low.
Forex Trading Analysis written by Munther Marji for ForexPros.
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