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Wednesday June 9, 2010 - 10:28:53 GMT
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Forexpros Daily Analysis - 09/06/2010ForexPros Daily Analysis June 9,
Fundamental Analysis: ECB Press
European traders await the ECB Press Conference on June 10.
European Central Bank holds this monthly press conference about 45 minutes after
the Minimum Bid Rate is announced. It is about an hour long and has two parts:
First, a prepared statement is read; then the conference is opened to press
questions. The questions often lead to unscripted answers that trigger market
volatility. The press conference, which is broadcasted on the ECB website, is
the ECB's primary method for communicating with investors about monetary policy.
It covers in detail the factors that affected the most recent interest rate and
other policy decisions, such as the overall economic outlook and inflation. Most
importantly, it often provides clues regarding future monetary policy. If the
statement is more hawkish than expected, that is usually good for the
The Euro fluctuated and
penetrated both the support & the resistance specified in yesterdayâ€™s report
without being able to reach any of the suggested targets in both cases. This
behavior enhances our hypothesis that we are in a wave 4 of a 5-wave decline,
since its known in (The Wave Principle) that wave 4 price action appears to be
random while this wave is developing, just as it is the case for wave B as well.
Breaking below 1.20 on Friday has opened the door for guessing the long term
targets in these areas, the question now is where are these targets? In our
opinion, we believe that there is one target, one point, which stands out of the
crowd, and that is 1.1211, which will be our target for the next few weeks. The
importance of this level is that it is the 61.8% Fibonacci for the whole move
from the historical low to the historical high. For the short term, the wave
count illustrated on the chart, shows a 4-wave drop, in which yesterdayâ€™s
â€śbreakâ€ť is wave 4, and we still have room for another leg down below 1.1875, in
what would be wave 5. Short term support is at 1.1923, and if broken the Euro
will continue its drop to 1.1825, and then 1.1754. The resistance is at 1.1975,
and breaking it will give the chance for the Euro to catch a break, and rise to
the important 1.2085 & 1.2148.
â€˘ 1.1923: the
rising trend line from Mondayâ€™s low on hourly & intraday charts.
1.1825: Feb 27th 2006 low.
â€˘ 1.1754: Dec 6th 2005
â€˘ 1.1975: important intraday level.
1.2085: Fibonacci 61.8% for the last drop from 1.2214.
â€˘ 1.2155: the top of
the falling channel on the 4-hour
The Dollar/Yen traded
below 92.14 for the whole past 24- hours, and did not touch this important
resistance. It also dropped to break the support specified in yesterdayâ€™s report
91.54, only to settle for 91.23. This very limited action, has postponed the
excitement, hopefully for no longer than today, especially after a critical
level has appeared this morning, catching all of our attention. This level is
the support at 90.52. The reasons which makes this level a shining star standing
out is that it combines the rising trend line from May 20th, with June 1st low,
giving this level a double importance. But, before we can test this level, we
need to break the intraday support 91.11. And if we do, we will drop to test
this very important (and hopefully very exciting) level. Breaking here would
have serious consequences on this pair, and 89.81 will only be a first &
modest target for this break, on the way to lower levels. Resistance is at
91.67, and if broken, the important support test scenario will be void, and we
will target 92.67 & 93.70.
â€˘ 91.11: important
â€˘ 90.52: June 1stlow & the important rising trend line on
â€˘ 89.81: May 26th low.
the falling trend line from Mondayâ€™s top on the hourly chart.
â€˘ 92.67: May
â€˘ 93.70: Apr 14th high.
---Forex Trading Analysis written
by Munther Marji for ForexPros.
Trading Futures and Options on Futures and Cash Forex
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Amazing Trader EVENT RISK Calendar:
Mon 16 Oct /ul>
01:30 CN- CPI
21:45 NZ- CPI
Tue 17 Oct
08:30 GB- CPI
09:00 DE- ZEW Survey
09:00 EZ- Final HICP
Wed 18 Oct
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.
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