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Wednesday June 2, 2010 - 11:29:02 GMT
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Forexpros Daily Analysis - 02/06/2010ForexPros Daily Analysis June 2,
Fundamental Analysis: ADP Nonfarm
Traders of the US anticipate the publication of the ADP
Nonfarm Employment Change tomorrow June 3. The report is a measure of the
monthly change of nonfarm private employment, based on a subset of aggregated
and anonymous payroll data that represents approximately 400,000 U.S. business
clients. This release, 2 days before the government-released employment data, is
a good predictive to the government's non-farm payrolls data. The change in this
indicator can be very volatile. 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
56.00K, a significant change from the past reading of
The Euro dropped
strongly, as it broke the support specified in yesterdayâ€™s report 1.2283, and
successfully reached the first suggested target 1.2142, and a new cycle low(just
as expected) at 1.2110, which is a level not seen since 2006! We expressed
confidence in this scenario in yesterdayâ€™s report, when we said â€śwe still
believe that the drop to a new cycle low below 1.2142 is only a matter of timeâ€ť.
And even after this â€śdiveâ€ť, we still believe that the Euro is ready to dive even
more, and we still believe that the most important resistance is Fibonacci 61.8%
at 1.2456! 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 1.2200, and breaking it will drag the Euro to test this fresh cycle low
1.2110 again, and then to test the important psychological level 1.2000. The
resistance is at 1.2279, which combines the top of the falling channel on the
4-hour chart (after adjusting it very slightly) and Fibonacci 61.8% for the drop
from yesterdayâ€™s high. Breaking it indicates a continuation of the rising
correction which will target 1.2390 first, then its ideal target: Fibonacci
61.8% at 1.2456. 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 1.2110 is only a matter of time, nothing will
change that except for a break of 1.2456.
Fibonacci 61.8% for the short term, which was tested more than once during the
â€˘ 1.2110: yesterdayâ€™s low, and the new cycleâ€™s and 4-year
â€˘ 1.2000: important psychological level.
1.2279: the top of the rising channel on the hourly & 4-hour charts after
adjusting it very slightly, and the short term Fibonacci 61.8% resistance.
1.2390: Fibonacci 50% for the drop from 1.2670.
â€˘ 1.2456: Fibonacci 61.8% for
the drop from 1.2670.
Dollar/Yen came closer than ever to the all important resistance 91.84, stopping
only 8 pips below it, which could be considered as a test of some sort! But we
still believe that there is a chance to come even closer to this important level
on the short term, and that we could actually â€śtouchâ€ť it before we drop! But in
order for it to hold to these chances, the price should hold above the 91.24
support, which is provided by the rising trend line on intraday charts. And
although we notice that this is an important level, the resistance 91.84 is
still the most important level for this pair right now! It 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. As we said, support
is at 91.24, and if broken, the price will retreat to 90.36 then to the very
important 89.72. We still believe that 91.84 is still the most important medium
term resistance for now, while the medium term support is at
â€˘ 91.24: the rising trend line from yesterdayâ€™s
low on intraday charts.
â€˘ 90.36: short term 50% Fibonacci level (for the
rising move from 88.96).
â€˘ 89.72: 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 ForexPros.
Trading Futures and Options on Futures and Cash Forex
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investors. You should carefully consider whether trading is suitable for you in
light of your circumstances, knowledge, and financial resources. You may lose
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recommendations are subject to change at any time.
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