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Wednesday June 30, 2010 - 10:10:48 GMT
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Forexpros Daily Analysis - 30/06/2010
ForexPros Daily Analysis June 30, 2010
Fundamental Analysis: ISM Manufacturing Index
Traders of the US anticipate the publication of the Institute of Supply
Management (ISM) Manufacturing Index. It 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
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 59.00.
The Euro broke the support specified in yesterdayâ€™s report 1.2240, and
dropped as expected, and reached the first suggested target 1.2170,
successfully! This drop, and its reaching Fibonacci 50% for the medium
term (yesterdayâ€™s target) confirms that we are â€“at least- in the middle
of a downward correction, with its ideal target at 1.2100. But if we add
to this, the fact that this drop came after the failure to break the
top of the descending channel, we can see that this is also negative for
the medium term as well, and we would conclude that this drop is not
just a correction! We wonder: whatâ€™s after Fibonacci 50%? Todayâ€™s
support is at Fibonacci 61% for the short term at 1.2186, and if broken,
we will fall to test the most important Fibonacci level: The ideal
target, 61.8% at 1.2100, which is the most important medium term
support, if this one is broken as well the target will be 1.2006. The
resistance is at 1.2312, and only with a break above here, this pair
will improve its negative technical outlook for the short term. If
broken, we will target 1.2396 once again, and if this one is also
broken, we will be on the way to 1.2519.
â€¢ 1.2186: Fibonacci 61.8% for the short term.
â€¢ 1.2100: Fibonacci 61.8% for the whole rising move from this cycleâ€™s
low to last weekâ€™s high.
â€¢ 1.2006: June 8th high.
â€¢ 1.2312: the top of the falling channel on the hourly chart.
â€¢ 1.2396: the weekly high so far.
â€¢ 1.2519: May 6th low.
The Dollar/Yen continued to drop slowly, a bit faster than usual
yesterday, in yet another confirmation that the bears are beating the
bulls! USDJPY broke the support specified in yesterdayâ€™s report 88.67,
and reached a new bottom for this recent falling trend at 88.27 without
being able to meet our suggested target 87.99. This confirms the
negative technical outlook we have seen lately. And we believe it will
persist as long as we are trading below the falling trend line from June
14th top, which is currently at 90.51. Short term support is at 88.48,
and breaking it will be another evidence that we are going down. This
break will target 87.99 & 87.35. The resistance has shifted to
89.31, where we see an important level for several reasons. Breaking
this level will give this pair a chance to test the important trend line
at 90.51 as a first target, and if this one is broken, things will go
against our outlook, as we will target 91.45. This pair is going as
expected, in the expected direction, and in convergence with our
negative technical outlook for the short & medium terms. We expect
the fall to go on, but we hope to see it go faster, and more exciting.
But for today in specific, we should be careful since we could see a
bounce, because we already touched the descending trend line illustrated
on the attached chart, a bounce is highly probable, even if it was a
temp, but the trend is down without a shadow of a doubt!
â€¢ 88.48: the rising trend line from yesterdayâ€™s low on intraday charts.
â€¢ 87.99: May 6th low.
â€¢ 87.35: Dec 9th 2009 low.
â€¢ 89.31: important intraday level.
â€¢ 90.51: the descending trend line from Jun 14th top on the hourly
â€¢ 91.45: June 21st high.
trading analysis written by Munther Marji for
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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09:30 GB- CPI
10:00 GB- ZEW Survey
13:30 US- PPI
Wed 13 Dec
00:30 AU- Employment
09:30 GB- Unemployment
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- Fed Decision
Thu 14 Dec
07:30 CH- SNB Decision
All Day- Global- flash PMIs
12:00 GB- Bank of England Decision
12:45 EZ- ECB Decision
13:30 US- Retail Sales
13:30 US- Weekly Jobless
14:45 US- Industrial Production
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- POTENTIAL PRICE RISK: Mediun Tue--10:00 GMT-- DE- ZEW. Second Tier Sentiment Survey
- POTENTIAL PRICE RISK: HIGH-Medium Tue--13:30 GMT-- US- PPI
- POTENTIAL PRICE RISK: HIGH-Medium Wed--09:30 GMT-- GB- Employment
- POTENTIAL PRICE RISK: HIGH Wed--13:30 GMT-- US- CPI
- POTENTIAL PRICE RISK: Medium Wed--15:30 GMT-- US- EIA Crude
- POTENTIAL PRICE RISK: High Wed--19:00 GMT-- US- Fed Decision
- POTENTIAL PRICE RISK: HIGH- Thu --00:30 GMT-- AU- Employment
- POTENTIAL PRICE RISK: Medium- Thu --All day-- global- flash PMIs
- POTENTIAL PRICE RISK: HIGH-Medium- Thu --07:30-- CH- Swiss National Bank Decision
- POTENTIAL PRICE RISK: HIGH-Medium- Thu --09:30-- GB- Retail Sales
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