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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:
Wed 18 Oct /ul>
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales
John M. Bland, MBA
- POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.
- POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.
- POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.
- POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.
- POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.
- POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.
- POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.
- POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.
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