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Wednesday July 21, 2010 - 09:36:36 GMT
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Forexpros - www.forexpros.com
Forexpros Daily Analysis - 21/07/2010
ForexPros Daily Analysis July 21, 2010
Fundamental Analysis: Initial Jobless Claims
The 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.
On a 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. A 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. The analysts predict a future
reading of 445.00K.
Although the Euro penetrated 1.30 and reached 1.3026, it dropped hard,
breaking the support of yesterdayâ€™s report 1.2952, and bottoming just
ahead of our suggested target and at 1.2838. With that, we have even
more evidence of a reversal, most important factors in this conception
are: 1. No daily close above 1.2997 & 2. A â€śreversal dayâ€ť pattern
for yesterdays bar/candle on the daily chart. This shows just how
important the area around 1.30 is, which is probably the level most
qualified to turn the Euro around, and resize this soaring move into a
correction! This strong & sharp jump is a natural fruit of breaking
the top of the channel after touching it for a record number of times,
but eventually the Euro managed to break it! After that serious barrier,
the energized Euro had faced even a harder one: Fibonacci 61.8% for the
giant move down from 1.3690 to 1.1875. This level is at 1.2997, and
will act as a heavy weight barrier in the face of this rise, which in
spite of the fact that it has achieved more than 1000 pips so far, it
still looks corrective (simply because it did not break the divine ratio
61.8% by closing above it). Now, even after a drop of more than 190
pips from yesterdayâ€™s top, 1.2997 will still be the most important
resistance in the neighborhood, only a break here means more gains. If
broken, we will soar above 1.30 for the first time in more than 2
months, and we will target 1.3092 & 1.3153. On the other hand, the
support has shifted down to 1.2869, breaking it would indicate that we
are drifting away from 1.2997. And that will target 1.2764 & 1.2707.
â€˘ 1.2869: Mondayâ€™s low.
â€˘ 1.2764: Fibonacci 50% for the short term.
â€˘ 1.2707: Fibonacci 61.8% for the short term.
â€˘ 1.2997: Fibonacci 61.8% for the massive dive from 1.3690 to 1.1875.
â€˘ 1.3092: May 10th high.
â€˘ 1.3153: May 3th low.
No change for yesterdayâ€™s outlook, after the Yenâ€™s strength penetrated
the lows of last December & January, we were left with no notable
support protecting the 15-year low which was reached last November at
84.81! We will not be a bit surprised if this pair started to move in
that direction, and tried to break that low! On the contrary, we have
been expecting this for weeks now, and it was included in our reports
several times. But, signs show that the possibility of a rising
correction to correct the fall from Wednesdayâ€™s top 89.09 to Fridayâ€™s
low 86.25 is growing. On the top of these signs: the inverted hammer
formation, which appeared on the daily chart, and the completed 5-wave
move (please refer to the attached chart). Therefore, and even though we
are negative about this pair on the medium term, we should not neglect
these signs which force themselves upon us for today! Short term support
is at 86.94, and if broken, the price will continue searching for new
lows, targeting 86.25, then the 15-year low 84.81. Resistance is
presented by the Fibonacci level 88.01. A break here indicates that the
odds of correction the whole 5 waves down from 92.87 are becoming
massive. This will target 88.78 & 89.56.
â€˘ 86.94: the bottom of the rising trend channel from Fridayâ€™s low on the
â€˘ 86.25: Fridayâ€™s low.
â€˘ 84.81: Now 27th low, and the lowest level since 1995!.
â€˘ 88.01: short term Fibonacci 61.8% level.
â€˘ 88.78: Fibonacci 38.2% level for the whole drop from 92.87 (the 5
â€˘ 89.56: Fibonacci 50% level for the whole drop from 92.87 (the 5 waves
trading analysis written by Munther Marji for
Trading Futures and Options on Futures and Cash
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