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Monday May 3, 2010 - 11:19:06 GMT
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Forexpros Daily Analysis - 03/05/2010ForexPros Daily Analysis May 3,
Fundamental Analysis: RBA Rate
Australian traders anticipate the publication of the monthly
interest rate statement. The Reserve Bank of Australia's monthly interest rate
statement describes its latest decision regarding changes to the country's short
term interest rates, monetary policy, and the direction of the economy. Short
term interest rates are the key factor in currency valuation. A dovish statement
could push AUD down against its rivals, while hawkish statement could boost the
The Euro broke the
hourly chart descending channel on Friday, at 1.3307. But such a break was
expected to achieve more than the 40 pips it did! Sadly, the Euro frustrated
supporters by going back inside the channel, but it left it with an exciting
stop very close to short term 61.8% Fibonacci level at 1.3202 (the low until the
moment of preparing this report is 1.3204). Thus, the chances of going up still
exist, and they totally depend on this support. We will place most of our
attention at 1.3202. If it holds, the price will try once more to break the
channel and trade above its top which is running currently at 1.3271. If this
most important resistance for the short term is broken, the Euro will jump to
1.3354 first, and may be to 1.3434 as well. On the other hand, a break of the
most important level for today 1.3202, will lead the price south, deeper inside
the channel, dropping to the important 1.3113 first, and then to 1.3050, the
last important support before the 1.30 landmark.
1.3202: short term 618% Fibonacci level.
â€¢ 1.3113: Mar 30th 2009 low.
1.3050: Apr 20th 2009 high.
â€¢ 1.3271: the top of
the broken channel.
â€¢ 1.3354: Apr 6th high.
â€¢ 1.3434: the important low of
With a single quick look
at the Dollar-Yen chart, we can clearly see that the most important level for
the short term is 93.47, which combines Fibonacci 61.8% for the short term with
the rising trend line from 91.58 on the hourly chart, giving this level double
importance. We believe a break of the closest short term support 93.89 will lead
to a test of the all important 93.47! And if this level is broken, we will drop
to another important level for both the short & medium terms at 92.72. In
this case, this support will be critical, since a break here will dramatically
change the technical outlook for both the short & medium terms. If broken,
the outlook will turn negative immediately. On the other hand, the resistance
which captured our attention all last week, at 94.30 will enjoy being the most
important for one more day. Breaking it will lead to the same targets we
suggested for this break last week, 95.05 first & then
â€¢ 93.89: Fibonacci 38.2% for the short
â€¢ 93.47: Fibonacci 61.8% for the short term, and the rising trend line
â€¢ 92.72: the rising trend line from 88.12 on hourly
â€¢ 94.30: Wednesdayâ€™s high which is very
close to last Mondayâ€™s high, and last weekâ€™s high.
â€¢ 95.05: Aug 24th
â€¢ 95.90: Jul 29th low.
---Forex Trading Analysis written
by Munther Marji for ForexPros.
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