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Monday February 8, 2010 - 14:11:42 GMT
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Forexpros.com Daily Analysis - 08/02/2010ForexPros Daily Analysis February 8, 2010
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Fundamental Analysis: German CPI
European traders look forward to the publication of the German Consumer
Price Index (CPI) tomorrow, February 9. The index measures the changes
in the price of goods and services.
The CPI measures price change from the perspective of the consumer.
It is a key way to measure changes in purchasing trends and inflation
in Germany. A higher than expected reading should be taken as
positive/bullish for the EUR (as the common way to fight inflation is
raising rates, which may attract foreign investment), while a lower
than expected reading should be taken as negative/bearish for the EUR.
Analysts predict no change in the future reading, a rate of -0.60%.
The Euro came very close to the 4-hour channel on Friday, after
breaking the support specified in the report, and the drop stopped only
2 pips before the first suggested target 1.3852. With this move taking
us close to the channel bottom, and then a fast bounce reaching 1.3666,
the odds of an upside correction remains present, but we need a break
of 1.3666 before we can say the odds favor that. Short-term resistance
is at 1.3666, and breaking it would indicate that the price is already
moving higher after the drop we witnessed last week, even if that was
only for a short term correction. The targets for such a correction
would be 1.3752 & 1.3805. While the support is at 1.3620, and
breaking it would bring back Fridayâ€™s target under the spotlight:
1.3582 & 1.3516.
â€¢ 1.3620: the falling trend line drawn from Jan 21st bottom (1.4027) on the hourly chart.
â€¢ 1.3582: Apr 6th high.
â€¢ 1.3516: Apr 2nd high.
â€¢ 1.3666: short term resistance.
â€¢ 1.3752: Fibonacci 38.2% for the last drop from 1.4025.
â€¢ 1.3805: Fibonacci 50% for the last drop from 1.4025.
The Pound dropped in a free fall after breaking the support specified
in Fridayâ€™s report 1.5690, and reached the target 1.5614 successfully.
This morning, a new bottom was reached at 1.5532. It seems that this
sharp trend is not tired yet, especially after breaking the falling
trend channel to the downside, which contributed to this sharp drop.
Thus, we will maintain a negative outlook, as long as the price is
trading below the bottom of the channel which is at 1.5704 currently.
And even though the price is far from this level at the moment, we will
consider this to be resistance of the day, and only if it is broken
that we will change our long held negative outlook. If this surprise
happens, and we break 1.5704 we will target short term Fibonacci
retracement levels 1.5800 & 1.5862. As for the support it is at the
nearby 1.5543, and breaking it would indicate that this Dollar tornado
will not stop soon, targeting 1.5445 & the important 1.5350.
â€¢ 1.5543: intraday support.
â€¢ 1.5614: Nov 28th 2008 high.
â€¢ 1.5512: May 12th high.
â€¢ 1.5704 the bottom of the falling broken trend channel.
â€¢ 1.5800: Fibonacci 50% for the last drop from 1.6067.
â€¢ 1.3863: Fibonacci 61.8% for the last drop from 1.6067.
Forex Trading Analysis written by Munther Marji for ForexPros.
For information on currency trading see 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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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.
co-founding Partner, Global-View.com
EXCLUSIVE: Global-View Daily Trading Chart Points Updated
EXCLUSIVE: Global-View Free Forex Database updated
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