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Wednesday August 4, 2010 - 10:52:10 GMT
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Forexpros Daily Analysis - 04/08/2010ForexPros Daily Analysis August 04,
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.
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.
higher than expected reading should be taken as negative/bearish for the
while a lower than expected reading should be taken as positive/bullish
the USD. The analysts predict a future reading of
The Euro broke
resistance specified in yesterday's report 1.3174, and came
very close to
hitting the suggested target of 1.3200, but it stopped (for
the second day in
a row) only 6 pips before it, before retreating
significantly to 1.3181. The
fact that the rising move is slowing down warns
of a possible correction for
the whole rise from Friday's low. Such a
correction would be a violent one,
with its size a little less than 200
pips, since its ideal target is at
1.3086. Therefore, we should keep eyes &
mind open today, and consider
all scenarios, and keep separate trading plans
ready. What is requested from
the Euro now is to break the resistance 1.3227
which it is trading almost 20
pips below. This resistance is the key to more
fireworks, and is the key to
1.33. If broken, we will target 1.3311 first,
and at a later time 1.3383 as
well. On the other hand, correction
possibilities remain weak as long as we
are trading above 1.3153. But if
broken, we will be already in a short term
correction, which will ideally
target the single most important support for
now 1.3086. And if this one is
also broken, we will drop to test Friday's low
* 1.3153: Fibonacci 38.2% for the rise from
* 1.3086: the rising trend line from Jun 29th low, and
retracement level for the rise from Friday's low. The single
support for the time being.
* 1.2979Friday's low, and the
launch point of this recent rising move.
the falling trend line from yesterday's high on intraday charts.
Mar 24th low.
* 1.3383: Mar 31st
The Dollar/Yen dropped in
the down wave we have talked about, it broke the
support specified in
yesterday's report 86.25, and successfully reached the
first suggested target
85.52. With this, the first target of the falling
wave is met, but what are
the next targets? In the attached chart, which is
a weekly one, we can see
the falling channel from Sep 07 top. Although the
bottom of this channel is
very far away, and is just above 74, but there is
an interesting trend line
inside it, combining the monthly lows of Dec 08,
Jan & Nov 09. This line
is around 82.65 currently, providing us with a
perfect target for this
dropping wave, since we still expect, as we did
before, that it will dive
below 84.81. Therefore, we expect the price to
reach this target, and as we
do, we also realize that the limited volatility
of this pair indicates that
this will take some time. As for the short term,
the support is at 85.31, and
breaking it would indicate that we are already
moving lower with the
objective of breaking 84.81, and reaching lows not
seen in 15 years. This
break will target 84.81 first, then 83.87. The
resistance is at 86.02, and if
broken, we will target the important 86.81,
* 85.31: Asian session low.
* 84.81: Nov
27th 2009 low, and the low of the last 15 years.
* 83.87: Fibonacci extension
level 138.2% for the falling wave from 86.86,
compared to the wave which
started at 88.10.
* 86.02: the falling trend line
from 88.10 on the hourly chart.
* 86.81: Jul 26th & 27th lows, and an
obvious hourly support.
* 87.49: Jul 29th high.
---Forex trading analysis written
by Munther Marji for Forexpros.
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