ForexPros Daily Analysis September 09, 2010
Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
Expert: Kris Matthews
When: Thu, Sep 16, 2010, 07:00 ET
Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.
Click here to join free
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Euro Dollar
The Euro’s rise stopped yesterday 7 pips before the level we recommended selling at. We saw this pair topping at 1.2761, before diving below 1.27 once again. Yesterday’s trading changed nothing in the technical outlook we talked about in the last 2 reports. After stopping just below the enormous resistance we talked about in Monday’s report 1.2920 (Monday’s high was 1.2916), we saw the Euro fall, breaking yesterday’s support 1.2777 and successfully reached the first suggested target at 1.2690. With this drop, the price has broken 3 critical levels at once: 1. the rising trend line from Aug 31st (which was broken at 1.2860), 2. the falling trend line from Sep 1st top and 3. the massive support at 1.2777. This has shifted the short & medium terms’ technical outlook to the negative territory! But on the other hand, after the big drop, chances of seeing a correction before resuming the journey south are massive. The ideal target area for a short term correction is from 1.2757 to 1.2817. Therefore, today’s best strategy may be selling if the price rebounds to this area. Short term resistance is at 1.2787, we do not expect it to be broken today. But if it is broken, we will jump to 1.2901 & 1.3047. Support is at 1.2675, and a break here would target 1.2608 and may be at a later time 1.2550.
Support:
• 1.2675: important intraday level.
• 1.2608: Aug 25th low.
• 1.2550: Jul 12th low.
Resistance:
• 1.2787: Fibonacci 50% for the drop from Monday’s high, and the retest level for the broken trend channel, the single most important resistance for the medium term.
• 1.2901: Aug 19th top.
• 1.3047: Fibonacci 61.8% for the medium term.
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USD/JPY
The Dollar/Yen dropped to 83.33, a new 15-year low! The latest drop came in the midst of the disappointment in the BoJ, which after a 2-day meeting, announced that it will not do anything at the moment to deal with the strong Yen. We have recently adjusted the falling trend line on the hourly chart to include Friday’s jump. We still believe in USD\/JPY weakness, and we believe it will travel south. Only a break of this line in specific will change our minds. This line is currently running at 84.88 (please refer to the attached chart). To keep trading below it, indicates more downside activity, especially after the BoJ disappointed again yesterday, as the “Japs” said once again they are watching closely, but they did nothing! The market has had it with these comments, and now the Japanese authorities should buy tickets to the “Yen Show”, and see what it will do to the Dollar & the Euro! Short term support is at 83.59, and if broken, we will be on the way to our long-awaited target at 82.00, then we will see the psychological level at 80.00. On the other hand, the above mentioned trend line is at 84.88. If broken, the Dollar will be violent to us all, as it will shoot up to 86.25 & 86.95.
Support:
• 83.59: short term 61.8% Fibonacci level.
• 82.00: the falling trend line on the weekly chart, combining the monthly lows o Dec 2008, Jan & Nov 2009.
• 80.00: psychological level.
Resistance:
• 84.88: the falling trend line from June 4th top on the hourly chart
• 86.25: Jul 16th bottom.
• 86.95: Jul 1st low.
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GBP/USD
The Pound broke through the top of the falling hourly channel at 1.5441 yesterday. As it did so, it also broke our resistance and reached the first suggested target 1.5507 successfully, before retreating back towards 1.54 this morning. The break of the channel top will have its influence on the short term price activity, but in order to do so, the price should hold above the support 1.5386 during the current correction. If it does, we can say with confidence that the technical outlook is positive. On the other hand, a break here would surely mean that the Pound is not capable of using the channel break to harvest more gains. If 1.5386 is broken, a strong drop is to be expected, targeting 1.5262 at least, and may be later 1.5147. Resistance is at 1.5461, it should be broken soon to facilitate capitalization on the break of the channel before the weekend. In this case, the targets will be huge, as we expect them to be 1.5646 & 1.5728.
Support:
• 1.5386: Fibonacci 61.8% for the rise from 1.5295.
• 1.5262: Jul 5th high.
• 1.5147: Jul 22nd low and the same area with Jul 20th low as well (which was 1.5151).
Resistance:
• 1.5461: Fibonacci 61.8% for the short term.
• 1.5646: Fibonacci 50% for the whole drop from Aug 6th top.
• 1.5728: Fibonacci 61.8% for the whole drop from Aug 6th top.
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Forex trading analysis written by Munther Marji for Forexpros.
---
Disclaimer:
Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.
Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
Expert: Kris Matthews
When: Thu, Sep 16, 2010, 07:00 ET
Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.
Click here to join free
---
Euro Dollar
The Euro’s rise stopped yesterday 7 pips before the level we recommended selling at. We saw this pair topping at 1.2761, before diving below 1.27 once again. Yesterday’s trading changed nothing in the technical outlook we talked about in the last 2 reports. After stopping just below the enormous resistance we talked about in Monday’s report 1.2920 (Monday’s high was 1.2916), we saw the Euro fall, breaking yesterday’s support 1.2777 and successfully reached the first suggested target at 1.2690. With this drop, the price has broken 3 critical levels at once: 1. the rising trend line from Aug 31st (which was broken at 1.2860), 2. the falling trend line from Sep 1st top and 3. the massive support at 1.2777. This has shifted the short & medium terms’ technical outlook to the negative territory! But on the other hand, after the big drop, chances of seeing a correction before resuming the journey south are massive. The ideal target area for a short term correction is from 1.2757 to 1.2817. Therefore, today’s best strategy may be selling if the price rebounds to this area. Short term resistance is at 1.2787, we do not expect it to be broken today. But if it is broken, we will jump to 1.2901 & 1.3047. Support is at 1.2675, and a break here would target 1.2608 and may be at a later time 1.2550.
Support:
• 1.2675: important intraday level.
• 1.2608: Aug 25th low.
• 1.2550: Jul 12th low.
Resistance:
• 1.2787: Fibonacci 50% for the drop from Monday’s high, and the retest level for the broken trend channel, the single most important resistance for the medium term.
• 1.2901: Aug 19th top.
• 1.3047: Fibonacci 61.8% for the medium term.
---
USD/JPY
The Dollar/Yen dropped to 83.33, a new 15-year low! The latest drop came in the midst of the disappointment in the BoJ, which after a 2-day meeting, announced that it will not do anything at the moment to deal with the strong Yen. We have recently adjusted the falling trend line on the hourly chart to include Friday’s jump. We still believe in USD\/JPY weakness, and we believe it will travel south. Only a break of this line in specific will change our minds. This line is currently running at 84.88 (please refer to the attached chart). To keep trading below it, indicates more downside activity, especially after the BoJ disappointed again yesterday, as the “Japs” said once again they are watching closely, but they did nothing! The market has had it with these comments, and now the Japanese authorities should buy tickets to the “Yen Show”, and see what it will do to the Dollar & the Euro! Short term support is at 83.59, and if broken, we will be on the way to our long-awaited target at 82.00, then we will see the psychological level at 80.00. On the other hand, the above mentioned trend line is at 84.88. If broken, the Dollar will be violent to us all, as it will shoot up to 86.25 & 86.95.
Support:
• 83.59: short term 61.8% Fibonacci level.
• 82.00: the falling trend line on the weekly chart, combining the monthly lows o Dec 2008, Jan & Nov 2009.
• 80.00: psychological level.
Resistance:
• 84.88: the falling trend line from June 4th top on the hourly chart
• 86.25: Jul 16th bottom.
• 86.95: Jul 1st low.
---
GBP/USD
The Pound broke through the top of the falling hourly channel at 1.5441 yesterday. As it did so, it also broke our resistance and reached the first suggested target 1.5507 successfully, before retreating back towards 1.54 this morning. The break of the channel top will have its influence on the short term price activity, but in order to do so, the price should hold above the support 1.5386 during the current correction. If it does, we can say with confidence that the technical outlook is positive. On the other hand, a break here would surely mean that the Pound is not capable of using the channel break to harvest more gains. If 1.5386 is broken, a strong drop is to be expected, targeting 1.5262 at least, and may be later 1.5147. Resistance is at 1.5461, it should be broken soon to facilitate capitalization on the break of the channel before the weekend. In this case, the targets will be huge, as we expect them to be 1.5646 & 1.5728.
Support:
• 1.5386: Fibonacci 61.8% for the rise from 1.5295.
• 1.5262: Jul 5th high.
• 1.5147: Jul 22nd low and the same area with Jul 20th low as well (which was 1.5151).
Resistance:
• 1.5461: Fibonacci 61.8% for the short term.
• 1.5646: Fibonacci 50% for the whole drop from Aug 6th top.
• 1.5728: Fibonacci 61.8% for the whole drop from Aug 6th top.
---
Forex trading analysis written by Munther Marji for Forexpros.
---
Disclaimer:
Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.