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Thursday May 20, 2010 - 10:30:08 GMT
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Forexpros Daily Analysis - 20/05/2010
ForexPros Daily Analysis May 20, 2010
Fundamental Analysis: German Ifo Business Climate Index
European traders anticipate the publication of the German Ifo Business
Climate Index. The German Information and Foschung (Ifo) Business
Climate Index determines the business sentiment and conditions in the
The reading is concluded from survey of about 7,000 businesses. A
higher than expected reading should be taken as positive/bullish for
the EUR, while a lower than expected reading should be taken as
negative/bearish for the EUR. Analysts predict a future reading of
The Euro broke the resistance specified in yesterdayâ€™s report 1.2223,
and successfully reached both suggested targets 1.2327 & 1.2412
with a perfect triumph. This climb is probably the first part of a
massive rising movie, which will be correcting the latest series of
collapses, which started at 1.3690 & smashed the Euro for more than
1500 pips in a few weeks. Today, will be a very important day for
determining the value of this possibility. If the price goes up from
here, this will indicate a correction for that massive move down from
1.3690, which will be able to take us to the 1.27-1.31 area within the
next 2 weeks. It is only natural for most traders to anticipate this
correction, but overexcitement could lead to premature, and wrongfully
timed trades, leading to negative outcomes. As for the short term, the
resistance is at 1.2364, and breaking it would indicate a continuation
of this spiky climb, targeting 1.2519 & 1.2604. The support is also
near, it is at 1.2320, and breaking it would take us back where we
traded recently: the important 1.2252 first, then 1.2159.
â€˘ 1.2320: Fibonacci 38.2% for the rise from yesterdayâ€™s low.
â€˘ 1.2252: Fibonacci 38.2% for the rise from yesterdayâ€™s low.
â€˘ 1.2159: important intraday support.
â€˘ 1.2364: important intraday resistance.
â€˘ 1.2519: May 6th low
â€˘ 1.2604: may 12th low.
Dollar/Yen broke the support specified in yesterdayâ€™s report 91.79, and
dropped by almost 100 pips, getting very close to our suggested target
90.75, without reaching it (The lowest price for the past 24 hours is
90.84). Stopping at this bottom is actually stopping at Fibonacci 50%
level for the whole rise from 87.99 to 93.62. Therefore, we are before
a very important level, which will be our â€śsupport of the dayâ€ť. If
broken, the drop will continue, and will target a very important level
at 90.14, and if this one is also broken, we will target 89.61. On the
other hand, resistance is at 91.50, and breaking it would improve the
negative technical outlook for the short term, probably slightly. This
break will give the price enough strength to rise towards 92.28, and
may be later the single most important resistance at this stage 93.49.
This resistance, which got attacked more than once without giving way,
is an important level not only for the short term, but for the medium
term as well. If broken, a lot of things will change, but until then,
the Yen is the one wearing the pants in this relationship.
â€˘ 90.81: Fibonacci 50% support for the rise from 87.99.
â€˘ 90.14: Fibonacci 61.8% support for the rise from 87.99.
â€˘ 89.61: Mar 9th low.
â€˘ 91.50: important intraday level.
â€˘ 92.28: Fibonacci 50% for the short term.
â€˘ 93.49: previous hourly resistance.
Forex Trading Analysis written by Munther Marji for Forex Pros.
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 time.
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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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