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Thursday September 2, 2010 - 10:12:38 GMT
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Forexpros Daily Analysis - 02/09/2010ForexPros Daily Analysis September 02,
For the first time in 11 days the Euro reached 1.28,
penetrating the resistance in yesterdayâ€™s report 1.2792, declaring that it
refuses to give up. However, the rise stopped just before our target 1.2871, and
the pair consolidated around 1.28 without getting very far from it, which keeps
the hopes of more upside activity alive. Looking at the hourly chart, we see an
obvious horizontal support at last weekâ€™s high 1.2777. The drop in the Asian
session stopped only 3 pips above it, to give it more importance. If we hold
above this level, the current bounce is expected to add more gains. But if
broken, the Euro will gradually give up the latest gains, and will drop to
1.2676 first, and at a later time to 1.2550. On the other hand, the resistance
now is at 1.2825, and if broken, then the odds of breaking 1.2871 will be
enormous. In this case, we expect the Euro to continue running the show, and to
target relatively high levels, such as the important Fibonacci levels at 1.2959
& 1.3047. We do hope that Tomorrowâ€™s US jobs report will put an end to the
boredom and frustration trading the Euro has brought in the last two
â€˘ 1.2777: last weekâ€™s top, Aug 27th high, and
an obvious hourly support.
â€˘ 1.2676: the bottom of the rising channel on the
â€˘ 1.2550: the support area containing Jul 7th & 12th
â€˘ 1.2825: Fibonacci 61.8% for the short
â€˘ 1.2595: Fibonacci 50% level for the drop from the 4-month high of
â€˘ 1.3047: Fibonacci 61.8% level for the drop from the 4-month high of
One again, Dollar/Yen
traded below the 84 level for a short while, then jumped to around 84.60 and
consolidated above 84, just like it did less than 24 hours ago! This is probably
just a short break, and once it is over, we expect the Yenâ€™s strength to
continue, and we believe we will see levels below 83.58 on the short term. We
have noticed an ideal (Dark Cloud Cover) candle pattern on the daily chart
(please refer to the attached chart), and this is a well known bearish pattern
which promises more excitement as we drop lower & lower, especially after
the BoJ disappointing the markets yesterday, and the â€śJapsâ€ť saying that they are
â€śwatching the currency movement closelyâ€ť! The market has had it with such
statements, the â€śjapsâ€ť now will have to take a seat and watch the spectacular
Yen show against the Dollar & the Euro. Short term support is at 84.06, if
broken, we will be on the way to our long awaited target 82.25, and may be later
we will test the psychological level 80.00, given enough time. On the other
hand, it is hard now to imagine the Dollar beating the 84.81 resistance, but if
it does, it will be violent in the face of those who believe in the Yen, and
will shoot to 86.25 & may be 86.81.
Fibonacci 61.8% for the short term.
â€˘ 82.25: the trend line combining the
monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.
â€˘ 84.81: the falling trend
line from Jun 4th top, a very important line.
â€˘ 86.25: Jul 16th low.
86.81: Jul 26th & 27th low.
The moment the Pound broke 1.5441 on Monday, this pair has left the
â€śneutral zoneâ€ť which we said is between 1.5587 & 1.5441. Therefore, it is
only logical now to expect the Pound to dive. But after more than 240 pips down
from yesterdayâ€™s top, the short term correction we are seeing now is (As we said
yesterday) no surprise, with a condition of staying below 1.5480. The Pound is
notorious for breaking, then moving in the other direction, before moving in the
right direction smoothly and strongly. And now that we have tested 1.5480, we
should wait and see what will the price do with it! Breaking this important
level (in case it happens) can change the outlook dramatically! Short term
support is at 1.5395, which was tested earlier this morning. If broken, the
Pound will continue to fall, and it will target 1.5262 & 1.5151. On the
other hand, the price has challenged 1.5480 yesterday, but it dropped more than
90 pips from yesterdayâ€™s high. If we maintain trading below it, that will not
change a thing. But if we break it, our negative outlook will suffer. The
resistance we put our attention at is 1.5441, which is the â€śguardianâ€ť of 1.5480!
if broken, the price will shoot up to the very important 1.5596, and the most
â€˘ 1.5392: short term 61.8% Fibonacci
â€˘ 1.5262: Jul 5th high.
â€˘ 1.5151: Jul 20th
â€˘ 1.5441: the falling trend line from
yesterdayâ€™s top on intraday charts.
â€˘ 1.5596: Aug 26th high and the slowly
falling trend line from Aug 16th top.
â€˘ 1.5700: Aug 16th important
---Forex trading analysis written by Munther Marji for
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