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Wednesday August 11, 2010 - 10:01:23 GMT
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Forexpros Daily Analysis - 11/08/2010ForexPros Daily Analysis August 11,
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
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 the
support specified in yesterday's report 1.3133, and
dropped as expected, only
to stop at 1.3070, without reaching the suggested
target. Then (which is a
lot more important), the price jumped in the
post-Fed chaos to 1.3226 (7 pips
below our resistance), testing the
previously broken trend line, accurately
(please refer to the attached
chart). If it a well known technical principle
that such an accurate retest
confirms the break it followed, and the new
direction, which is down in this
case. Looking at the attached chart, we can
see that: 1. the rising trend
line was broken decisively and 2. the price
retested this line in an
accurate fashion. These are obvious indication of a
Therefore, unless the price goes back up to trade above the
line, we expect more downside activity. Short term support is at
which we are trading just above at the moment. If broken, the price
drop targeting the important Fibonacci level 1.2961, and if broken
On the other hand, resistance is at 1.3158, and if broken, this pair
contradict all what we have said, and will shoot up to 1.3255, and may
* 1.3032: Fibonacci 61.8% for the whole
rising move from 1.2731 to Friday's
& 3-month high.
Fibonacci 61.8% for the whole rising move from 1.2731 to Friday's
* 1.2875: Jul 26th low, a well known support/resistance
* 1.3158: short term 61.8% Fibonacci
* 1.3233: the retest level for the broken trend line.
* 1.3347: May
3rd unforgettable top.
broke the support specified in yesterday's report at 85.78,
and dropped to
85.16, approaching this year's low of 85.00 which we have
seen on Friday.
However, the price consolidated above 85, and corrected the
drop up to 85.45.
With this, we see a continuation of the correction from
Friday's low, after
hitting another, lower target for the downward wave we
have been talking
about for weeks, , but what are the next targets? In the
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
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 85.16, 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 will target 83.87 & at a
later time, we still believe
in our 82.65 target. The resistance is at
85.81, and if broken, the price
will continue its bounce, targeting 86.43
* 85.16: "post-Fed" low.
Fibonacci extension level 138.2% for the falling wave from 86.86,
the wave which started at 88.10.
* 82.65: the trend line combining the
monthly lows of Dec 08, Jan & Nov 09,
on the weekly
* 85.81: short term Fibonacci 61.8% level
* 86.43: the top of the rising corrective trend channel on the hourly
* 87.49: Jul 29th high.
---Forex trading analysis written
by Munther Marji for Forexpros.
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