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Tuesday June 1, 2010 - 09:39:56 GMT
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Forexpros Daily Analysis - 01/06/2010ForexPros Daily Analysis June 1,
European traders anticipate the publication of the Producer Price
Index on June 2nd. The PPI is an inflationary indicator that measures the
average change in selling prices received by domestic producers of goods and
services. The PPI measures price change from the perspective of the seller. The
PPI looks at three areas of production: industry-based, commodity-based, and
stage-of-processing-based companies. When producers pay more for goods and
services, they are likely to pass the higher costs to the consumer, so PPI is
thought to be a leading indicator of consumer inflation. 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 0.70%.
The Euro traded below the resistance specified in yesterdayâ€™s report
1.2333 for the whole 24 hours since the issuance of yesterdayâ€™s report. It did
not break it, only to trade in a narrow range, which has postponed the drop but
did not delete its possibility. We still believe that the Euro is ready to dive,
and 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 1.2244,
and breaking it will drag the Euro to the important 1.2142 then to a new cycle
low at 1.2068. The resistance is at 1.2312, 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.
1.2244: Asian session low.
â€¢ 1.2142: This cycleâ€™s and 4-year low.
1.2068: Apr 13th 2006 low, the last important support before the 1.2000
â€¢ 1.2312: the top of the rising channel on
the hourly & 4-hour charts.
â€¢ 1.2411: Fibonacci 50% for the drop from
â€¢ 1.2472: Fibonacci 61.8% for the drop from
The Dollar/Yen retreated
a little bit, and consolidated around 91, but we still believe that we could see
the price targeting the most important resistance for now: Fibonacci 61.8% for
the short term at 91.84. But in order for it to hold to these chances, the price
should hold above the 90.87 support, and not to start drifting lower and away
from 91! The resistance 91.84 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 90.87, 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€¢ 90.87: important
â€¢ 90.26: short term 50% Fibonacci level (for the rising move
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
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your initial investment. Opinions, market data, and recommendations are subject
to change at any time.
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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
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Fri 27 Oct
12:30 US- GDP
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- POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.
- POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.
- 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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