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Monday July 12, 2010 - 10:37:57 GMT
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Forexpros Daily Analysis - 12/07/2010ForexPros Daily Analysis July 12,
Analysis: German ZEW Economic Sentiment
The European traders
anticipate The German Zentrum fĂĽr EuropĂ¤ische Wirtschaftsforschung (ZEW)
Economic Sentiment to determine the sentiment of German institutional
Above 0 indicates optimism while below 0 indicates pessimism. It's
a leading indicator of business conditions. The reading is concluded from survey
of about 350 German institutional investors and analysts.
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. The
analysis predict a future reading of 25.20.
The Euro broke the support specified in Fridayâ€™s report
1.2677, and dropped to 1.2607 before it continued its way down after the new
weekâ€™s open to 1.2578 (todayâ€™s low at the moment of preparing this report). The
rise topped at 1.2720, in what turned out to be the most serious test of the top
of the rising channel on the hourly chart. The drop which followed the open,
raised the possibilities that we could be before an important turning point at
the channel top, specially after dropping from Fridayâ€™s high 150 pips so far. As
we said in our last report: â€śWe will not be able to escape the fact that a break
here will be a very positive signal for both the short & medium terms. But,
if we keep trading below (or around) it, we could be facing a turning point
which will probably lead to a drop of hundreds of pointsâ€ť, and we still stand by
this view! Short term support is at 1.2552, and once we break it, we will start
drifting away from the channel top, and will target 1.2442, and may be 1.2393.
The resistance is at 1.2607, and if broken, the negative outlook we have been
praising will get a â€śshockâ€ť, and the Euro will be on the way to 1.2737, and may
â€˘ 1.2552: Wednesdayâ€™s low.
May 18th high.
â€˘ 1.2393: June 25th high.
1.2607: the falling trend line from Fridayâ€™s top on hourly chart.
May 12th high.
â€˘ 1.2801: May 11th
The Dollar/Yen continued to
rise, reaching 89.13, but at a much slower pace that we have seen on Wednesday.
This slow bounce came as no surprise, with the consolidation around 88, and
after bouncing from the support area shown on the hourly chart below, and after
clearly breaking the falling trend line from June 21st top. It seems as if we
are in a wave 4 correction now (please refer to the attached chart), which will
ideally target a Fibonacci ratio of the wave 3 dive. Short term support is at
Fridayâ€™s top 88.60, and breaking it would indicate a continuation of the drop to
87.99 & 87.35. The resistance is at 89.01, and breaking it would mean that
the Dollar will continue to capitalize on the break of the above mentioned trend
line, which will ideally target Fibonacci levels for wave 3: 89.52 & 90.13.
This pair is going as expected, in the expected direction, and in convergence
with our negative technical outlook for the medium term. We absolutely expect
the fall to continue on the medium term. But we should not neglect the enormous
possibilities of a bounce up targeting Fibonacci levels: a bounce is highly
probable, and it is most likely to be just a temp, but the trend is down without
a shadow of a doubt!
â€˘ 88.60: Fridayâ€™s top.
87.99: the bottom of the rising channel on the hourly chart.
â€˘ 87.35: an
obvious support area on the hourly chart, and Dec 9th 09
â€˘ 89.01: the falling trend line from Asian
session high on intraday charts.
â€˘ 89.52: Fibonacci 50% for the wave 3 dive
â€˘ 90.13: Fibonacci 61.8% for the wave 3 dive (from
---Forex trading analysis written by Munther Marji for Forexpros.
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Amazing Trader EVENT RISK Calendar:
Mon 18 Dec
10:00 EZ- final HICP
Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account
Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude
Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP
Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes
Mon 25 Dec
00:00 Christmas Holidays
Potential Trading Opportunities
John M. Bland, MBA
- POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.
- POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
- POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity
- POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
- POTENTIAL PRICE RISK: Medium- Wed --15:30-- US- EIA Crude
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