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Monday March 15, 2010 - 11:03:31 GMT
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Forexpros Daily Analysis - 15/03/2010Forexpros Daily Analysis March 15,
Interest Rate Decision
Traders of the US await the publication of the
Federal Open Market Committee (FOMC) decision on short term interest
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
USD, while a lower than expected rate is negative/bearish for the USD. Analysts
predict a reading of 0.25%.
The Euro rose breaking the resistance 1.3734, jumping 60
pips above it, coming very close to 1.38, but without reaching the first
suggested target 1.3838. This expected rise came as a result of breaking the
triangle to the upside, and the positive technical outlook which followed this
break, and we have talked about it on Friday. To maintain this positive outlook,
the Euro should hold above the most important support for the short term 1.3635.
But of course, a correction wonâ€™t harm the outlook, as long as it holds above
this support. The closest short term support is 1.3726, and breaking it would
indicate a normal correction after the last rise, with the ideal target at
1.3635, the most important support for the time being. Only if this level is
broken that we expect further downside activity targeting 1.3543. As for the
resistance it is at 1.3768, and breaking it would indicate a continuation of the
rise that followed the triangle break. The targets for such a break would be the
important 1.3838, and after that we might see 1.3928, as the Euro tries to
approach the important 1.40 landmark.
important intraday support.
â€˘ 1.3635: the retest level for the broken trend
line with in the triangle formation.
â€˘ 1.3543: Mar 10th
â€˘ 1.3768: Fibonacci 61.8% for the short
â€˘ 1.3838: Feb 9th high.
â€˘ 1.3928: Jul 3rd
Although the Dollar-Yen
reached a new top for this cycle on Friday at 91.07, it closed slightly down, at
only 5 pips below the open price, which makes this day a candidate for a
â€śReversal Dayâ€ť pattern. Also, the very small real body for Fridayâ€™s candlestick
makes it very close to a â€śDojiâ€ť pattern, and if we want to be extra specific we
can refer to it as a â€śShooting Starâ€ť candle pattern. All these indications give
us one direction: down. Short term support is provided by the rising trend line
from 89.61 on the hourly chart, which is currently at 90.33. If broken, this
positive outlook will get the support it needs to push down. The next set of
targets will be 89.61 & 89.04. As for the resistance it is at 90.76, and in
case it is broken, the price will contradict all these technical signals, and
would jump strongly to 91.60, and may be later to the important
â€˘ 90.33: the rising trend line from 89.61 on
the hourly chart.
â€˘ 89.61: Mar 9th low.
â€˘ 89.04: Nov 24th
â€˘ 90.76: Fibonacci 61.8% for the short
â€˘ 91.60: Oct 29th high.
â€˘ 92.31: Oct 26th
---Forex trading analysis by Munther Marji for ForexPros.com.
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Amazing Trader EVENT RISK Calendar:
Mon 16 Oct /ul>
01:30 CN- CPI
21:45 NZ- CPI
Tue 17 Oct
08:30 GB- CPI
09:00 DE- ZEW Survey
09:00 EZ- Final HICP
Wed 18 Oct
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.
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