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Thursday February 18, 2010 - 10:02:13 GMT
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Forexpros Daily Analysis - 18/02/2010ForexPros Daily Analysis February 18,
Fundamental Analysis: US CPI
Traders of the US look forward to the publication of the Consumer
Price Index (CPI). 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 the US. A
higher than expected reading should be taken as positive/bullish for the USD (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 USD. Analysts predict a rise from the past reading to a
reading of 0.30%.
stopped just 8 pips above the resistance specified in yesterday's report 1.3778,
before collapsing completely, breaking the support 1.3740 and successfully
reaching both suggested targets 1.3685 & 1.3626. As we always say, stopping
close enough to a Fibonacci resistance is an evidence of a downtrend, and this
is what happened yesterday. Today, it seems we will have a correction for
yesterday's huge drop, before continuing to go lower is such a strong downtrend.
Intraday support 1.3562 is an important support, and as long as we hold above
it, the odds for having our correction will be immense. But, if we break it,
this sharp strong drop will go on and the next set of targets will be the very
important support 1.3482 & if broken 1.3422. On the other hand, if we
survive above 1.3562, we will test the resistance 1.3594, and if broken the
correction will be immediately initiated, wit an ideal target at 1.3671, and if
broken the next target will be 1.3724.
â€¢ 1.3562: the
most important intraday support.
â€¢ 1.3482: Fibonacci 61.8% for the long
â€¢ 1.3422: May 18th low.
â€¢ 1.3594: Feb 12th
â€¢ 1.3671: Fibonacci 50% for yesterday's collapse.
â€¢ 1.3724: hourly
As expected, the
Dollar-Yen maintained trading inside the channel we talked about yesterday,
broke the resistance 90.53 & successfully reached the first suggested target
91.14. its only coincidence that short term Fibonacci 61.8% is almost at this
level, specifically at 91.15. If it is broken, we will continue to rise and
target the important Fibonacci 61.8% at 91.76. And this is an important
resistance that if it is broken we can say with confidence that the Dollar has
freed itself from short term downtrend. The first target of this "freedom" will
be Oct 27th top 92.31. Short term resistance is at 90.80, and breaking it would
reverse the strength signs we have seen in the past two days, creating a modest
surprise. If this surprise actually happens, then we will target the most
important short term support at 90.12, and only if broken we expect the
Dollar-yen to reach 89.54.
â€¢ 90.80: Asian session
â€¢ 90.12: the bottom of the rising channel on the hourly chart.
89.54: Feb 11th low.
â€¢ 91.15: short term Fibonacci
â€¢ 91.76: Fibonacci 61.8% for the whole drop from
â€¢ 92.31: Oct 27th high.
Trading Analysis written by Munther Marji for
For information on US dollar index see
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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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