ForexPros Daily Analysis April 29, 2010
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Fundamental Analysis: BoJ Press Conference
Japanese traders look forward to the press conference held by the Bank of Japan, their preferred method of communicating with investors. Topics at such conferences generally include economic outlook, inflation and changes in interest rates.
The Euro broke the support specified in yesterday’s report 1.3188, and successfully reached the first suggested target 1.3113 with unbelievable accuracy (Yesterday’s low was 1.3113 EXACTLY). Although the price bounced back above 1.32 (confirming the importance of 1.3113), but 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, or actually we are probably in one, 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 1.3190, and breaking it would indicate a drop to 1.3113 once again, then maybe we will see 1.3050. The resistance is at 1.3232, and breaking it would confirm that we are in a rising correction for yesterday’s drop, with the ideal target at 1.3299, and the maximum target at the channel’s top 1.3340. We see that it is very hard for the Euro to decisively break this resistance.
Support:• 1.3190: important intraday support.• 1.3113: Mar 30th 2009 low.• 1.3050: Apr 20th 2009 high.
Resistance:• 1.3232: important intraday resistance.• 1.3299: Fibonacci 61.8% for the last drop from 1.3414.• 1.3340: the top of the falling channel on hourly chart.
We would completely abandon our focus on 93.62, after the price broke it several times without being able to create a decisive move in any of the times it broke this previously important level. We will focus on analyzing the rising move from 92.80, which seems to be doing good. This move has reached 94.30 so far, and it stopped in the same area as Monday’s rise, when the high was 94.34. Thus, 94.30 will be our resistance for the day, breaking it would give us a chance to finally seethe long awaited 95 area, where there are several important levels we like such as 95.05 & 95.90. But when talking about support, we should consider the correction possibility for the whole rise from 92.80. IF we break Fibonacci 38.2% for the rise from 92.80 to 94.30, which is at 93.73, we will be officially in a correction. This correction targets 93.37 ideally, and if broken we will see a strong hard drop to the most important support 92.38. This is a critical support for the medium term as well.
Support:• 93.73: Fibonacci 38.2% for the short term.• 93.37: Fibonacci 61.8% for the short term.• 92.38: the rising trend line from 88.12 on hourly chart, after it has been modified.
Resistance:• 94.30: yesterday’s high which is very close to Monday’s high, and this week’s high 94.34.• 95.05: Aug 24th high.• 95.90: Jul 29th low.
Forex Trading Analysis written by Munther Marji for ForexPros.
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