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Monday September 13, 2010 - 09:50:08 GMT
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Forexpros Daily Analysis - 13/09/2010
ForexPros Daily Analysis September 13, 2010
The Euro jumped after the marketâ€™s open and continued a bounce it
started on Friday, going back above 1.28. Now the question is will the
EUR succeeds in creating yet another test of 1.2920? In fact, we do not
believe it will, and even if it did, this will provide a selling
opportunity. At the time these words are written, the EUR is trying to
break short term 61.8% Fibonacci level (please refer to the attached
chart). We believe that surpassing this level will be easy, as our eyes
are set on the last important level before 1.2920, which is 1.2853. Our
strategy for today will be waiting for the Euro to reach this high, in
order to sell with a stop/reverse above 1.2920. Therefore, the
resistance levels are 1.2853, and 1.2920 which if broken will leave our
negative outlook void, and we will target 1.3047. But, as long as we are
below 1.2920, this pair is a â€śsellâ€ť. On the other hand, the support is
at 1.2764, then there is 1.2724 which would make an ideal target for a
sell at 1.2853. Then there is 1.2658 & 1.2608.
â€˘ 1.2764: the rising trend line from Fridayâ€™s low on intraday charts.
â€˘ 1.2658: Wednesdayâ€™s low.
â€˘ 1.2608: Aug 25th low.
â€˘ 1.2853: Sep 1st high, and the last important resistance before 1.2920.
â€˘ 1.2920: Aug 19th top.
â€˘ 1.3047: Fibonacci 61.8% for the medium term.
No change for our negative technical outlook for this pair, as long as
we are trading below the falling trend line from June 4th top. Last
week, we adjusted the falling trend line on the hourly chart to include
Fridayâ€™s jump. We still believe in USD/JPY weakness, and we believe it
will travel south. Only a break of this line in specific will change our
minds. This line is currently running at 84.72 (please refer to the
attached chart). To keep trading below it, indicates more downside
activity, especially after the BoJ disappointed again last week, as the
â€śJapsâ€ť said once again they are watching closely, but they did nothing!
The market has had it with these comments, and now the Japanese
authorities should buy tickets to the â€śYen Showâ€ť, and see what it will
do to the Dollar & the Euro! Short term support is at 83.79, and if
broken, we will be on the way to our long-awaited target at 82.00, then
we will see the psychological level at 80.00. On the other hand, the
above mentioned trend line is at 84.83. If broken, the Dollar will be
violent to us all, as it will shoot up to 86.25 & 86.95.
â€˘ 83.79: the rising trend line from Wednesdayâ€™s low on intraday charts.
â€˘ 82.00: the falling trend line on the weekly chart, combining the
monthly lows of Dec 2008, Jan & Nov 2009.
â€˘ 80.00: psychological level.
â€˘ 84.72: the falling trend line from June 4th top on the hourly chart
â€˘ 86.25: Jul 16th bottom.
â€˘ 86.95: Jul 1st low.
The Pound jumped after the marketâ€™s open and continued a bounce it
started on Friday, going back above 1.54. Now the question is will is
succeeds in creating yet another test of 1.5490? In fact, we could see a
test of this massive resistance area, but we believe that such a test
would provide a selling opportunity, with a stop above 1.5532. The
reasons behind this belief are two: we have seen how this massive
resistance level has rejected the price 3 times recently, and because
the falling trend line from Aug 16th top is just above it providing
another important resistance. It is hard to picture this pair breaking
both levels today, and that is why we recommend this strategy: sell
around 1.5490, stop clearly above 1.5532, and the target at 1.5344. On
the other hand, breaking 1.5532 decisively is not probable today, but if
it happens, the Pound will target 1.5646.
â€˘ 1.5395: Fibonacci 61.8% for the short term.
â€˘ 1.5344: Sep 6th â€ś& 10th low.
â€˘ 1.5295: Sep 7th low.
â€˘ 1.5490: the massive resistance level containing the highs of Sep 1st
â€˘ 1.5532: Wednesdayâ€™s high which is just above the falling trend line
from Aug 16th top.
â€˘ 1.5646: Fibonacci 50% for the whole drop from Aug 6th top.
trading analysis written by Munther
Marji for Forexpros.
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