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Forexpros Daily Analysis - 31/05/2010ForexPros Daily Analysis May 31,
Fundamental Analysis: ISM
Traders of the US anticipate the publication of the
ISM Manufacturing Index. The Institute of Supply Management Manufacturing Index
tracks the amount of manufacturing activity that occurred in the previous month.
This data is considered a very important and trusted economic measure. If the
index has a value below 50, due to a decrease in activity, it tends to indicate
an economic recession, especially if the trend continues over several months. A
value substantially above 50 likely indicates a time of economic growth. The ISM
index is the result of a monthly survey of over 400 companies in 20 industries
throughout the 50 states. The ISM's leading quality has been proven over time.
During a recession, the ISM's bottom may precede the turning point for the
economic cycle by some months. 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
The Euro tried to
approach the all important resistance 1.2472, but it topped at 1.2451, and then
it went back to drop again, breaking the rising trend line on the hourly chart.
We still believe that the most important resistance is Fibonacci 61.8% at
1.2472! We do not see any reason to change our negative technical outlook for as
long as the price is below it. And since that the price has touched the channel
top, and came close to Fibonacci then it started to fall, then the negative
outlook is still here, strongly! As for the short term the support is at 1.2283,
and breaking it will drag the Euro to the important 1.2152 then to a new cycle
low at 1.2068. The resistance is at 1.2333, and breaking it indicates a
continuation of the rising correction which will target 1.2411 first, then its
ideal target at 1.2472. It goes without saying that this 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.
1.2283: important intraday support.
â€¢ 1.2152: last weeks low.
Apr 13th 2006 low, the last important support before the 1.2000
â€¢ 1.2333: the retest level for the rising
trend line on the hourly chart, which was broken on Friday.
Fibonacci 50% for the drop from 1.2670.
â€¢ 1.2472: Fibonacci 61.8% for the
drop from 1.2670.
reached 91.59 after the open of the new week, and we could see the price
targeting the most important resistance for now: Fibonacci 61.8% for the short
term at 91.84, which is the separating level between a positive & a negative
medium term outlook. If price stops at or around 91.84, the odds of going back
down will be enormous, and a top around here could provide us with a wonderful
chance to sell for medium term. But if broken, we will see a strong jump to
92.95 and may be 93.65. Support is at 90.95, and if broken, the price will
retreat to 90.26 then to the very important 89.67. We still believe that 91.84
is still the most important medium term resistance for now, while the medium
term support is at 89.67.
â€¢ 90.95: the rising trend
line on hourly chart.
â€¢ 90.26: short term 50% Fibonacci level (for the rising
move from 88.96).
â€¢ 89.67: the slowly rising trend line on hourly
â€¢ 91.84: Fibonacci 61.8% for the short term,
the most important resistance at all for the time being.
â€¢ 92.95: May 18th
â€¢ 93.65: Apr 6th low.
Forex 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:
Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan
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- POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.
- POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.
- POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top Weekly WTI Statistic.
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