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Tuesday December 8, 2009 - 10:37:27 GMT
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Forexpros Daily Analysis - 08/12/2009Forexpros Daily Analysis Dec 8, 2009
Fundamental Analysis: Interest Rate Decision
The Reserve Bank of New Zealand (RBNZ) will release its decision on short term interest rate Tomorrow (Dec 9).
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 NZD, while a lower than expected rate is negative/bearish for the NZD.
Analysts forecast Tomorrow's rate to remain stable at 2.50%.
Euro Dollarâ€“ Falling 5 waves & an awaited upward correction
The Euro broke the support 1.4850 and successfully reached the first
target 1.4760, stopping just 5 pips below it, and bouncing back more
than 130 pips. We can see a very clear set of 5 waves falling from
1.5139 (as illustrated on the attached chart), that match all of
Elliott waves rules. And if our wave count is correct, that means 2
things: first the first phase of the falling trend from 1.5139 is over,
and that calls for an upward correction. And the second is that after
that upward correction that matches the falling move, the falling trend
will resume to new lows below 1.4755! Short-term support is Fibonacci
61.8% at 1.4806, and if broken the odds of falling below yesterdayâ€™s
low will be enormous. Our targets for such a drop are 1.4724 &
1.4649. Whereas the resistance is at 1.4844, and breaking it would mean
launching an upward correction that ideally targets 1.4947 &
â€˘ 1.4806: Fibonacci 61.8% for the short-term.
â€˘ 1.4724: Fibonacci 38.2% for the whole rise from 1.4045.
â€˘ 1.4649: Oct 7th low.
â€˘ 1.4896: intraday resistance.
â€˘ 1.4947: Fibonacci 50% for the drop from 1.5139
â€˘ 1.4992: Fibonacci 61.8% for the drop from 1.5139
USDJPYâ€“ Standing on the edge!
As we expected in yesterdayâ€™s report when we said â€ś a falling
correction is the most logical expectation after a move of the size we
seen on Fridayâ€ť, Dollar-Yen broke the support 89.52 and fell to reach
88.75 this morning. It seems that we are standing on an important
support, because we have actually touched the trendline rising from
85.07. That is why we will consider this line as the most important
support of the day, which is currently at 88.75, and we are just pips
above it. If this line is broken, the falling correction will go on and
target 88.33 first, and then the important Fibonacci 50% support for
the whole rise from 84.81at 87.78. But, if price manage to survive the
touch of this line, it will be ready for another jump that is expected
to break short-term resistance 89.13 and target 89.75 first, and then
November 12th top 90.59.
â€˘ 88.75: the rising trendline from 85.07 on the hourly chart.
â€˘ 88.33: previous well known support/resistance area.
â€˘ 87.78: Fibonacci 50% for the whole move from 84.81 to 90.75.
â€˘ 89.13: intraday resistance on the hourly chart.
â€˘ 89.75: Fibonacci 50% for short-term.
â€˘ 90.59: Nov 12th high.
Forex Trading Analysis written by Munther Marji for Forexpros
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
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All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan
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- POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.
- POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.
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