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Wednesday January 6, 2010 - 10:40:21 GMT
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Forexpros Daily Analysis - 06/01/2010Forexpros Daily Analysis Jan 6,
Fundamental Analysis: Interest Rate
The Bank of England (BOE) decision on short term interest rate
is due to be published tomorrow (Jan 7). 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 GBP, while a lower than expected rate
is negative/bearish for the GBP.
Analysts predict that the rate will remain
accuracy, the Euro stopped at the suggested reversal point 1.4485 (yesterdayâ€™s
high was 1.4482), and exactly as we expected, started a big drop that reached
200 pips, passing by and breaking the support 1.4454, and reaching both
suggested targets 1.4369 & 1.4303 successfully. And with coming back to
areas below 1.43, we once again assure the importance of 1.4264, and we will
consider it support of the day, and the borderline between a continuation of the
drop from 1.4482, or a bounce to the upside. If this important support is taken,
we expect the Euro to drop on the first trading day of the New Year towards
1.4176 & 1.4103. But if it holds, a test of short term resistance 1.4327
will follow, and breaking it would lead to a correction of yesterdayâ€™s big fall,
ideally targeting 1.4406, and if broken we will jump to 1.4485, which reversed
the upside activity, and caused yesterdayâ€™s drop.
1.4264: Dec 21st low.
â€¢ 1.4176: Sep 1st low.
â€¢ 1.4103: Aug 10th
â€¢ 1.4327: Fibonacci 61.8% for the micro
â€¢ 1.4569: Fibonacci 61.8% for the short term.
â€¢ 1.4485: the
resistance that caused yesterdayâ€™s
Dollar-Yen broke the
trend lien rising from 84.81, but the drop that followed was limited, before
going back above the line. This behavior recommends caution, the price should
trade below certain levels to maintain any importance for this break. Short-term
resistance is 92.45, and the support is at 91.75. . If this support is broken,
we will fall to the important 90.55, which is also another important support for
the short term, and maybe we will see 89.58 after that. On the other hand, if
the price holds above this support, a short term rise will be initiated,
challenging short term resistance at 92.45, and breaking this level would lead
to a correction to the drop from 93.20 (and may be to more than that), targeting
93.08, and once its broken we will be looking forward to the long awaited
â€¢ 91.75: the rising trend line from yesterdayâ€™s
low on intraday charts.
â€¢ 90.55: Fibonacci 61.8% for the whole move from
88.91 to 93.20.
â€¢ 89.58: Fibonacci 61.8% for the whole move from 87.35 to
â€¢ 92.45: short-term Fibonacci 61.8%
â€¢ 93.08: previous support/resistance area.
â€¢ 93.53: Mar 19h
---Forex trading by Munther Marji for Forexpros. See Forexpros for Commodities and
other trading tools.
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Amazing Trader EVENT RISK Calendar:
Tue 12 Dec
09:30 GB- CPI
10:00 GB- ZEW Survey
13:30 US- PPI
Wed 13 Dec
00:30 AU- Employment
09:30 GB- Unemployment
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- Fed Decision
Thu 14 Dec
07:30 CH- SNB Decision
All Day- Global- flash PMIs
12:00 GB- Bank of England Decision
12:45 EZ- ECB Decision
13:30 US- Retail Sales
13:30 US- Weekly Jobless
14:45 US- Industrial Production
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- POTENTIAL PRICE RISK: Mediun Tue--10:00 GMT-- DE- ZEW. Second Tier Sentiment Survey
- POTENTIAL PRICE RISK: HIGH-Medium Tue--13:30 GMT-- US- PPI
- POTENTIAL PRICE RISK: HIGH-Medium Wed--09:30 GMT-- GB- Employment
- POTENTIAL PRICE RISK: HIGH Wed--13:30 GMT-- US- CPI
- POTENTIAL PRICE RISK: Medium Wed--15:30 GMT-- US- EIA Crude
- POTENTIAL PRICE RISK: High Wed--19:00 GMT-- US- Fed Decision
- POTENTIAL PRICE RISK: HIGH- Thu --00:30 GMT-- AU- Employment
- POTENTIAL PRICE RISK: Medium- Thu --All day-- global- flash PMIs
- POTENTIAL PRICE RISK: HIGH-Medium- Thu --07:30-- CH- Swiss National Bank Decision
- POTENTIAL PRICE RISK: HIGH-Medium- Thu --09:30-- GB- Retail Sales
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