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Wednesday December 2, 2009 - 12:27:22 GMT
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Forexpros Daily Analysis - 02/12/2009Forexpros Daily Analysis Dec 2,
Interest Rate Decision
The EU Central
Bank will announce the new monthly short term interest rate tomorrow (Dec
The decision on where to set interest rates depends mostly on growth
outlook and inflation. The primary objective of the central bank is to achieve
price stability. High interest rates attract foreigners looking for the best
"risk-free" return on their money, which can dramatically increases demand for
the nation's currency.
A higher than expected rate is positive/bullish for
the EUR, while a lower than expected rate is negative/bearish for the
Analysts expect tomorrow's interest rate to remain stable at
For more on interest rates see
The Euro broke the
resistance 1.5050 but settled for 1.5116 only, without reaching the first
suggested target 1.5144. This morning it started to fall and get closer little
by little to the first important trendline which is currently at 1.5058. We
believe that testing this line is only a matter of time. And if the Dollar
succeeds in breaking this line, it would put the Euro under pressure, because
that break would mean that we are already in a correction for the whole move
from 1.4827. Such a correction would take this pair to Fibonacci 50% for the
short-term at 1.4972 as a first target, and may be Fibonacci 61.8% at 1.4937 as
a second target & an important support. On the other hand, short-term
resistance is at 1.5101, and only breaking it would improve the â€śexhaustedâ€ť
technical outlook. If this break happens, it will target 1.5200 first, and may
be 1.5260 later. But, as long as we are below 1.5101 exhaustion will lead this
pair downwards to test several support levels and important
â€˘ 1.5058: the rising trendline from 1.4827
on the hourly chart.
â€˘ 1.4972: Fibonacci 50% for the short-term.
Fibonacci 61.8% for the short-term.
important intraday resistance from yesterday.
â€˘ 1.5200: resistance area from
â€˘ 1.5260: resistance area from
Dollar-Yen stopped with
astonishing accuracy at Fibonacci 61.8% at 87.50, as yesterdayâ€™s high was 87.51!
Stopping at Fibonacci resistance levels indicates that the trend is still down.
This makes us expect that the whole up-move from 84.81 is only a correction,
that will ends once we break the rising trend channel, and then the downtrend
will come back to search for new lows. Fibonacci 61.8% at 87.50 is still the
most important resistance, and if price succeeds in breaking it, then a test of
the bottom of the supposed wedge formation at 88.28 is to be expected, and if
this important resistance is also broken, the next target will be the top of
that formation which is currently at 88.72. todayâ€™s support is yesterdayâ€™s
86.84, and breaking it would mean a continuation of the downtrend after some
rising bounces. That would target the bottom of the rising trend channel from
last weekâ€™s bottom on the hourly chart, which is currently at 85.84, and if
broken we will test 84.81. Fibonacci says the trend is down, and the Yen
strength is still expected, but we should be aware of the possibility of
interventions by the Japanese government that would left this pair many steps
â€˘ 86.84: short-term support.
â€˘ 85.84: the
bottom of the rising trend channel from last weeks bottom.
â€˘ 86.44: last
â€˘ 87.50: Fibonacci 61.8% short-term
(for the move from 89.17 to 84.81).
â€˘ 88.28: the bottom of the supposed wedge
â€˘ 88.72: the top of the supposed wedge
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Amazing Trader EVENT RISK Calendar:
Mon 18 Dec
10:00 EZ- final HICP
Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account
Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude
Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP
Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes
Mon 25 Dec
00:00 Christmas Holidays
Potential Trading Opportunities
John M. Bland, MBA
- POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.
- POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
- POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity
- POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
- POTENTIAL PRICE RISK: Medium- Wed --15:30-- US- EIA Crude
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