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Tuesday May 25, 2010 - 09:19:53 GMT
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Forexpros Daily Analysis - 25/05/2010ForexPros Daily Analysis May 25,
Fundamental Analysis: New Home
Traders of the US anticipate the publication of the New Home Sales.
It measures the annualized number of new residential buildings that were sold
during the previous month. This report helps to analyze the strength of the US
housing market, which helps to analysis the economy as a whole. The new home
sales report is quite volatile and subject to huge revisions. A higher than
expected reading should be taken as positive/bullish for the USD, while a lower
than expected reading should be taken as negative/bearish for the USD. Analysts
predict a future reading of 425.00K.
The Euro broke the support specified in yesterdayâ€™s report 1.2492, and
reached both suggested targets 1.2406 & 1.2295 with perfect success. This
â€ścollapseâ€ť which dropped the single currency more than 200 pips in less than 24
hours came as a result of breaking the rising trend line from this cycleâ€™s low
on the hourly chart 1.2142, which we said about â€śwe believe that a break of this
line (in case it happens) will be the technical event of the day.â€ť The
subsequent drop matched the importance of this line, and really exciting! This
drop broke the Fibo 61.8% support at 1.2344, although it tricked us at the
beginning that it will stop at that important level, when it reached an intraday
low of 1.2343 and then bounced back above 1.24. Now, we have two heavyweight
technical evidences that the trend is down: Breaking the above mentioned trend
line, and breaking the Fibo 61.8% support. Therefore, we see a very gloomy
technical outlook for the Euro, we believe dipping below 1.2142 is only a matter
of time. Todayâ€™s support is at 1.2256, and breaking it, would resume this
collapse, targeting a test of this cycleâ€™s low 1.2142, and then the
psychological 1.2000. As for the resistance, it is provided by the falling trend
line from Fridayâ€™s top. Breaking this line will take the price higher to
Fibonacci retracement levels for the short term, in te area between 1.2420 &
â€˘ 1.2256: important intraday level & a
previous support area which showed strength.
â€˘ 1.2142: This cycleâ€™s low, and
the low of the last 4 years!.
â€˘ 1.2000: psychological
â€˘ 1.2364: the falling trend line from
Fridayâ€™s top on intraday charts.
â€˘ 1.2420: Fibonacci 38.2% for the drop from
â€˘ 1.2515: Fibonacci 61.8% for the drop from
The Dollar failed to
capitalize on its consolidation above the 90 landmark, and gave up to the Yen at
90.60, then dropped more than 100 pips to reach the support specified in
yesterdayâ€™s report exactly (the support was 89.56 & todayâ€™s low until the
moment of preparing this report is 89.56).Today, Yenâ€™s strength will completely
depend on its ability to break the support 89.56. If the Yen can push the Dollar
Below this level, we will witness a strong drop, targeting the same set of
targets we suggested in the last 2 reports: 88.96 & 87.99. The resistance is
at 90.23 and breaking it (if it happens) will target Fibonacci retracement
levels 91.24 & 91.89. The latter is the most important resistance for the
short (and may be medium) term for now. The downtrend needs to hold below the
falling intraday trend line to keep things going smoothly (which is currently at
90.23). If broken, the short term negative technical outlook will change
dramatically. The yes in still the one wearing the pants in this relationship,
but beware of 90.23.
â€˘ 89.56: important intraday
level, just below the falling trend line on the hourly chart, and also todayâ€™s
low at the moment of preparing this report.
â€˘ 88.96: Thursdayâ€™s low, and a
previous very important support.
â€˘ 87.99: Mar 6th
â€˘ 90.23: the falling trend line from
yesterdayâ€™s top on intraday charts.
â€˘ 91.29: Fibonacci 50% for the short
â€˘ 91.84: Fibonacci 61.8% for the short term.
Trading Analysis written by Munther Marji for Forex Pros.
Disclaimer: 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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EXCLUSIVE: Global-View Daily Trading Chart Points Updated
EXCLUSIVE: Global-View Free Forex Database updated
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