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Wednesday July 14, 2010 - 10:07:18 GMT
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Forexpros Daily Analysis - 14/07/2010ForexPros Daily Analysis July 14,
Analysis: Initial Jobless Claims
Initial Jobless Claims is a
seasonally adjusted measure of the number of people who file for unemployment
benefits for the first time during the given week. This data is collected by the
Department of Labor, and published as a weekly report.
The number of jobless
claims is used as a measure of the health of the job market, as a series of
increases indicates that there are fewer people being hired.
week-to-week basis, claims are quite volatile.
Usually, a move of at least
35K in claims, is required to signal a meaningful change in job growth.
higher than expected reading should be taken as negative/bearish for the USD,
while a lower than expected reading should be taken as positive/bullish for the
USD. This week analysts expect a figure of 449.00K.
The Euro broke the resistance specified in yesterdayâ€™s
report 1.2601, and jumped sturdily as it was expected after this break, stopping
only a couple of pips before our suggested target 1.2737 (yesterdayâ€™s high was
1.2735), in what indicates just how important this target/resistance area is.
Technically, the most important event of the past 24 hours was a new touch of
the top of the rising channel on the hourly chart, as if the Euro is seeking to
score a record in how many times it is touching its channel. This clearly shifts
all lights to the top of this channel, this area deserves our absolute
attention, The Euro & the Dollar, are both in a â€śmake it or break itâ€ť
situation! The importance of (at least) the 4th test of this channel top is
absolutely enormous, it is the single most important factor in determining
medium term direction: from here we will see the Euro soaring for hundreds of
pips, of the Dollar dragging it down for hundreds of pips. Short term resistance
is at yesterdayâ€™s top 1.2735, if broken, we will quick-jump to 1.2801, and may
be then 1.2888. The support is at 1.2691, and a decisive break here will
indicate that we are drifting away from the channel top, and will most probably
lead to a hard fall to 1.2552, and may be 1.2442.
1.2691: important intraday level.
â€˘ 1.2552: last Wednesdayâ€™s low.
1.2442: May 18th high.
â€˘ 1.2735: yesterdayâ€™s
â€˘ 1.2801: May 11th high.
â€˘ 1.2888: April 20th
In what seems like a hint
that the Dollar is going on with its rising correction, the USDJPY jumped and
broke the resistance specified in yesterdayâ€™s report 88.76, touched 89 as it
topped at 89.09 during the Asian session. In spite of the shooting star pattern
on the daily chart, we believe that the Dollar is trying to reach Fibonacci 50%
of wave 3. And we still believe as well that the wave count we introduced last
week is providing us with the most probable scenario: we are in a wave 4
correction (please refer to the attached chart). Short term resistance is at
89.09, and breaking it would mean that the Dollar will continue to capitalize
its latest bounce, which will ideally target Fibonacci levels for wave 3: 89.52
& 90.13. Support is at 88.42, and breaking it would indicate a continuation
of the drop to 87.35 & 86.47. 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
â€˘ 88.42: short term 61.8% Fibonacci level.
87.35: an obvious support area on the hourly chart, and Dec 9th 09 low.
86.47: previous well known support.
Asian session top.
â€˘ 89.52: Fibonacci 50% for the wave 3 dive (from
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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