ForexPros Daily Analysis September 20, 2010
Euro Dollar
Although the Euro penetrated 1.3047 on Thursday, and jumped strongly, reaching the first suggested target 1.3145, it stopped there, and dropped from Friday high which was 1.3157, sharply. The importance of breaking 1.3047 comes from the fact that this level is Fibonacci 61.8% for the whole drop from 1.3332 which is a 4-month high, to 1.2586 which is a 2-month low. We have abandoned our negative outlook after the penetration of 1.3047, but it seems that the Euro has failed at the first serious test after that. The price has stopped at the retest level of the rising trend line from the June 7th low (please refer to the attached chart). Therefore, the technical outlook, even after penetrating 1.3047, is not strong enough to consider the Euro a “buy”, after failing in the retest. Short term resistance is at 1.3118, and only if broken will the Euro have another chance to rise. If it does break this level targets will be 1.3194 & 1.3306. On the other hand, the support is at 1.3060, and if broken, we will head towards the Fibonacci retracement levels for the whole rise from 1.2643 to Friday’s high. The first two of these levels are 1.2961 & 1.2900.
Support:
• 1.3056: the rising trend line from Friday’s low on intraday charts.
• 1.2961: Fibonacci 38.2% for the rise from 1.2643.
• 1.2900: Fibonacci 50% for the rise from 1.2643.
Resistance:
• 1.3118: Aug 5th low.
• 1.3194: Aug 2th high.
• 1.3306: Aug 9th high.
---
USD/JPY
Japan warned speculators once again on Friday, that it will be violent against those who buy the Yen. The price has moved sideways for quite a while now. This leaves a question hanging: after the intervention, what’s next? this pair calmed after the Japs stormed it up! But failure to break 85.89 which we talked about its importance yesterday, leaves possibilities of downside activity open. All the major Yen pairs jumped together during yesterday’s Asian session, gaining more than 2.5% each, which fueled speculation that the Japs have done it! Shortly after that, in a quickly arranged news conference, finance minister (Noda) confirmed it and said: “yes, we have intervened”! Finally ladies & gentlemen, here is your long awaited intervention. The Japanese authorities have had it after they saw 82 appears on the screens for the first time since 1995. A lot of people would now argue that this is not the time for technical analysis, but the intervention only takes a short period of time to be completed, then things go back into the hands of the market powers. This intervention has caused the price to break the falling trend line from June 4th top on the hourly chart, which resulted in reaching 85. Now, this surge has a huge barrier in front of it, which is 85.89! This is where the falling trend line from May 5th top is running currently. If broken, the price will fly, targeting 86.81 & 87.56. On the other hand, the support is at 84.25, and if broken we will drop to the important 83.73, then 82.87.
Support:
• 84.25: Fibonacci 38.2% for the short term.
• 83.73: Fibonacci 61.8% for the short term.
• 82.87: Sep 14th low, and the low for the last 15 years.
Resistance:
• 85.89: the falling trend line from May 5th top on the daily chart
• 86.95: Jul 1st low.
• 87.56: Jul 20th high.
---
GBP/USD
The Pound has touched our resistance of 1.5278 on Friday, as the high was 1.5727, and it traded below there the whole time. We have clarified in Thursday’s & Friday’s reports the huge importance of this level. When we investigate the rising move from 1.5295. When we do, we see that it is a correction for the previous dive from 1.5996, which topped very close to the Fibonacci 61.8% level. The Pound reached 1.5727, the highest level since August 11th, whereas the important resistance is at 1.5728 (please refer to the attached chart). The most important level is definitely 1.5728. This level will determine everything for the medium term. If we break it, we will literally fly, and if we fail close to it, this pair will be frustrated and move south. Our resistance of the day is definitely 1.5728. If broken, we will target 1.5854 & 1.5905. On the other hand, it would sound bizarre to say that the Pound is weak, and we will not say that. But we do believe that as long as it is below 1.5728, it will be vulnerable. The first sign of a failure at 1.5728 will be going back to trade below 1.5660. If this happens, expect a big drop, targeting 1.5549 &1.5438.
Support:
• 1.5660: the rising trend line from Tuesday’s low on intraday charts.
• 1.5549: short term Fibonacci 38.2% resistance.
• 1.5438: short term Fibonacci 61.8% resistance.
Resistance:
• 1.5728: Fibonacci 61.8% for the whole drop from Aug 6th top.
• 1.5854: Aug 4th low.
• 1.5905: Aug 2nd & 10th high.
---
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.
Euro Dollar
Although the Euro penetrated 1.3047 on Thursday, and jumped strongly, reaching the first suggested target 1.3145, it stopped there, and dropped from Friday high which was 1.3157, sharply. The importance of breaking 1.3047 comes from the fact that this level is Fibonacci 61.8% for the whole drop from 1.3332 which is a 4-month high, to 1.2586 which is a 2-month low. We have abandoned our negative outlook after the penetration of 1.3047, but it seems that the Euro has failed at the first serious test after that. The price has stopped at the retest level of the rising trend line from the June 7th low (please refer to the attached chart). Therefore, the technical outlook, even after penetrating 1.3047, is not strong enough to consider the Euro a “buy”, after failing in the retest. Short term resistance is at 1.3118, and only if broken will the Euro have another chance to rise. If it does break this level targets will be 1.3194 & 1.3306. On the other hand, the support is at 1.3060, and if broken, we will head towards the Fibonacci retracement levels for the whole rise from 1.2643 to Friday’s high. The first two of these levels are 1.2961 & 1.2900.
Support:
• 1.3056: the rising trend line from Friday’s low on intraday charts.
• 1.2961: Fibonacci 38.2% for the rise from 1.2643.
• 1.2900: Fibonacci 50% for the rise from 1.2643.
Resistance:
• 1.3118: Aug 5th low.
• 1.3194: Aug 2th high.
• 1.3306: Aug 9th high.
---
USD/JPY
Japan warned speculators once again on Friday, that it will be violent against those who buy the Yen. The price has moved sideways for quite a while now. This leaves a question hanging: after the intervention, what’s next? this pair calmed after the Japs stormed it up! But failure to break 85.89 which we talked about its importance yesterday, leaves possibilities of downside activity open. All the major Yen pairs jumped together during yesterday’s Asian session, gaining more than 2.5% each, which fueled speculation that the Japs have done it! Shortly after that, in a quickly arranged news conference, finance minister (Noda) confirmed it and said: “yes, we have intervened”! Finally ladies & gentlemen, here is your long awaited intervention. The Japanese authorities have had it after they saw 82 appears on the screens for the first time since 1995. A lot of people would now argue that this is not the time for technical analysis, but the intervention only takes a short period of time to be completed, then things go back into the hands of the market powers. This intervention has caused the price to break the falling trend line from June 4th top on the hourly chart, which resulted in reaching 85. Now, this surge has a huge barrier in front of it, which is 85.89! This is where the falling trend line from May 5th top is running currently. If broken, the price will fly, targeting 86.81 & 87.56. On the other hand, the support is at 84.25, and if broken we will drop to the important 83.73, then 82.87.
Support:
• 84.25: Fibonacci 38.2% for the short term.
• 83.73: Fibonacci 61.8% for the short term.
• 82.87: Sep 14th low, and the low for the last 15 years.
Resistance:
• 85.89: the falling trend line from May 5th top on the daily chart
• 86.95: Jul 1st low.
• 87.56: Jul 20th high.
---
GBP/USD
The Pound has touched our resistance of 1.5278 on Friday, as the high was 1.5727, and it traded below there the whole time. We have clarified in Thursday’s & Friday’s reports the huge importance of this level. When we investigate the rising move from 1.5295. When we do, we see that it is a correction for the previous dive from 1.5996, which topped very close to the Fibonacci 61.8% level. The Pound reached 1.5727, the highest level since August 11th, whereas the important resistance is at 1.5728 (please refer to the attached chart). The most important level is definitely 1.5728. This level will determine everything for the medium term. If we break it, we will literally fly, and if we fail close to it, this pair will be frustrated and move south. Our resistance of the day is definitely 1.5728. If broken, we will target 1.5854 & 1.5905. On the other hand, it would sound bizarre to say that the Pound is weak, and we will not say that. But we do believe that as long as it is below 1.5728, it will be vulnerable. The first sign of a failure at 1.5728 will be going back to trade below 1.5660. If this happens, expect a big drop, targeting 1.5549 &1.5438.
Support:
• 1.5660: the rising trend line from Tuesday’s low on intraday charts.
• 1.5549: short term Fibonacci 38.2% resistance.
• 1.5438: short term Fibonacci 61.8% resistance.
Resistance:
• 1.5728: Fibonacci 61.8% for the whole drop from Aug 6th top.
• 1.5854: Aug 4th low.
• 1.5905: Aug 2nd & 10th high.
---
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.