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Wednesday May 26, 2010 - 09:47:52 GMT
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Forexpros Daily Analysis - 26/05/2010ForexPros Daily Analysis May 26,
Fundamental Analysis: GDP Price
Traders of the US anticipate the publication of the GDP Price
Index. The index measures the annualized change in the price of all goods and
services included in GDP.
Therefore - the GDP Price Index is a key inflation
measure. 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 future reading of
Although the Euro broke
the support specified in yesterdayâ€™s report 1.2256, and fell afterwards by 80
pips, it came back to break the resistance specified in the report (opposite to
our expectations), and traded above it after the American closing, but it was
not ale to hold this high! This strong bounce, did not break any important
levels (so far), to the degree that we can say that the negative technical
outlook has changed. When analyzing the 4-hour chart, we can see a beautiful
channel, with the price trading in the middle of it at the moment. We can also
see that the whole movement of yesterday was in the middle of this channel, and
it did not touch or even approach the top or the bottom of the channel. The fact
that Fibonacci 61.8% is at the same level as the top of this channel, at 1.2481,
makes this level very important. We do not see any reason to change our negative
technical outlook for as long as the price is below it. As for the short term
the support at 1.2256 has gained more importance after Fibonacci 61.8% for the
short term has moved towards it exactly. Breaking this support will drop the
Euro to the same target set for yesterday: 1.2142 first, then 1.2000. The
resistance is at 1.2301, and breaking it indicates a continuation of the rising
correction with its ideal targets between 1.2365 & 1.2481. It goes without
saying that the latter is the single most important resistance for the time
being, and the separating point between a continuation of the current downtrend,
and a reversal to an uptrend! We still believe, we still believe that the drop
to a new cycle low below 1.2142 is only a matter of time, nothing will change
that except for breaking 1.2481.
â€¢ 1.2256: Fibonacci
61.8% for the short term, important intraday level & a previous support area
which showed strength.
â€¢ 1.2142: This cycleâ€™s low, and the low of the last 4
â€¢ 1.2000: psychological level.
important intraday level.
â€¢ 1.2365: Fibonacci 38.2% for the drop from
â€¢ 1.2481: Fibonacci 61.8% for the drop from
movement, making us gradually lose hope to feel some excitement coming from this
boring pair! But, there is a slowly rising channel on the hourly chart, which
contained all the previous daysâ€™ shallow moves. It is a coincidence that short
term 38.2% Fibonacci level at 90.74 is at the top of this channel, which gives
it more importance. The bottom of this channel is at 89.37, and will be slowly
rising to 89.56, the well known support. Todayâ€™s main levels are support 90.14
& resistance 90.74, we can only hope to see some action upon a break of one
of them. If we break the support 90.14, we expect to test the bottom of the
channel 89.37 first, then to drop to 88.96 on the way to lower targets for the
break of this channel. If we break the resistance 90.74, the correction of the
drop from 93.62 will go on, with its ideal targets at 91.29 & 91.84. We
believe that 91.84 is still the most important medium term resistance for
â€¢ 90.14: important intraday level.
the bottom of the slowly rising channel on hourly chart.
â€¢ 88.96: Thursdayâ€™s
low, and a previous very important support.
90.74: the top of the slowly rising channel on hourly chart, and short term
38.2% Fibonacci level.
â€¢ 91.29: Fibonacci 50% for the short term.
Fibonacci 61.8% for the short term.
Forex Trading Analysis
written by Munther Marji for Forex Pros.
Disclaimer: Trading Futures and Options on Futures and Cash Forex transactions
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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:
Wed 18 Oct /ul>
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.
- POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.
- POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.
co-founding Partner, Global-View.com
EXCLUSIVE: Global-View Daily Trading Chart Points Updated
EXCLUSIVE: Global-View Free Forex Database updated
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