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Thursday May 27, 2010 - 08:38:10 GMT
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Forexpros Daily Analysis - 27/05/2010ForexPros Daily Analysis May 27,
Fundamental Analysis: Chicago
Traders of the US anticipate the publication of the Chicago PMI. The
Chicago Purchasing Managers Index determines the economic health of the
manufacturing sector in Chicago region.
Any reading above 50 indicates
expansion of the manufacturing sector, while a reading below 50 indicates
contraction. The Chicago PMI can be of some help in forecasting the US ISM and
usually has an impressive correlation with it. 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 60.00.
Euro broke the support specified in yesterdayâ€™s report 1.2256, and fell
afterwards by 104 pips, only to stop before our suggested target & the
4-year low 1.2142. And after finding a bottom at 1.2152, the price bounced
almost 150 pips in 8 only hours! 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 rising move from 1.2152 was in the middle of this channel,
and it did not touch or even approach the top or the bottom of the channel.
Today, we will favor Fibonacci 61.8% over the top of this channel. Our most
important resistance is Fibonacci 61.8% at 1.2472 and not the channel top! 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 is at 1.2252, and breaking
it will drop the Euro to the same target set for yesterday: 1.2142 first, then
1.2000. The resistance is at 1.2350, and breaking it indicates a continuation of
the rising correction with its ideal targets between 1.2411 & 1.2472. 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 that the drop to a new
cycle low below 1.2142 is only a matter of time, nothing will change that except
for breaking 1.2472.
â€¢ 1.2252: the rising trend line
from todayâ€™s low on intraday charts.
â€¢ 1.2142: This cycleâ€™s low, and the low
of the last 4 years!
â€¢ 1.2000: psychological
â€¢ 1.2350: Fibonacci 38.2% for the drop from
â€¢ 1.2411: Fibonacci 50% for the drop from 1.2670, which is very close
to the 4-hour channel top.
â€¢ 1.2472: Fibonacci 61.8% for the drop from
Although the price
approached our resistance 90.74, and stopped only 9 pips below it, we have seen
nothing but more semi-horizontal 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. The channelâ€™s top is just above short term 38.2% Fibonacci level at
90.74, making this resistance the most important for now. The bottom of this
channel is at the well known support 89.56. Todayâ€™s main levels are support
90.09 & resistance 90.74, we can only hope to see some action upon a break
of one of them. If we break the support 90.09, we expect to test the bottom of
the channel 89.56 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 now,
while the medium term support is at 89.56.
the rising trend line from Tuesdayâ€™s low on hourly chart.
â€¢ 89.56: the bottom
of the slowly rising channel on hourly chart.
â€¢ 88.96: Thursdayâ€™s low, and a
previous very important support.
â€¢ 90.74: Fibonacci
38.2% for the short term.
â€¢ 91.29: Fibonacci 50% for the short term.
91.84: Fibonacci 61.8% for the short term.
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:
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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