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Tuesday September 21, 2010 - 10:09:35 GMT
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Forexpros Daily Analysis - 21/09/2010
ForexPros Daily Analysis September 21, 2010
Stunningly, the Euro stopped exactly & down to
the pip at our suggested resistance in yesterdayâ€™s report 1.3118, to
confirm the importance of this level, which will live to see itself as
our resistance for one more day. The Euro had penetrated 1.3047 on
Thursday, and jumped strongly, reaching the first suggested target for
this break 1.3145, it stopped there, and dropped from Friday high which
was 1.3157, sharply. We have abandoned our negative outlook after the
penetration of 1.3047, but it seems that the Euro has failed at the
first serious test after that. The price has stopped at the retest level
of the rising trend line from the June 7th low (please refer to the
attached chart), and then left us with a (Shooting Star) candle pattern.
Therefore, the technical outlook, even after penetrating 1.3047, is not
strong enough to consider the Euro a â€śbuyâ€ť, after failing in the
retest. Short term resistance is at 1.3118, and only if broken will the
Euro have another chance to rise. If it does break this level targets
will be 1.3194 & 1.3306. On the other hand, the support is at
1.3056, and if broken, we will head towards the Fibonacci retracement
levels for the whole rise from 1.2643 to Fridayâ€™s high. The first two of
these levels are 1.2961 & 1.2900.
â€˘ 1.3056: the rising trend line combining Wednesdayâ€™s, Thursdayâ€™s &
yesterdayâ€™s lows, on the hourly chart.
â€˘ 1.2961: Fibonacci 38.2% for the rise from 1.2643.
â€˘ 1.2900: Fibonacci 50% for the rise from 1.2643.
â€˘ 1.3118: Yesterdayâ€™s high, Aug 5th low.
â€˘ 1.3194: Aug 2th high.
â€˘ 1.3306: Aug 9th high.
No change whatsoever in this pair that is not moving! Japan warned
speculators once again on Friday, that it will step in if needed. The
price has moved sideways for a few days now. This leaves a question
hanging: after the intervention, whatâ€™s next? this pair calmed after the
Japs stormed it up! But failure to break 85.89 which we talked about
its importance in the past few days, leaves possibilities of downside
activity open. All the major Yen pairs jumped together on Wednesday,
gaining more than 2.5% each, which fueled speculation that the Japs have
done it! Shortly after that, in a quickly arranged news conference,
finance minister (Noda) confirmed it and said: â€śyes, we have
intervenedâ€ť! Finally ladies & gentlemen, here is your long awaited
intervention. The Japanese authorities have had it after they saw 82
appears on the screens for the first time since 1995. A lot of people
would now argue that this is not the time for technical analysis, but
the intervention only takes a short period of time to be completed, then
things go back into the hands of the market powers. This intervention
has caused the price to break the falling trend line from June 4th top
on the hourly chart, which resulted in reaching 85. Now, this surge has a
huge barrier in front of it, which is 85.89! This is where the falling
trend line from May 5th top is running currently. If broken, the price
will fly, targeting 86.81 & 87.56. On the other hand, the support is
at 84.25, and if broken we will drop to the important 83.73, then
â€˘ 84.25: Fibonacci 38.2% for the short term.
â€˘ 83.73: Fibonacci 61.8% for the short term.
â€˘ 82.87: Sep 14th low, and the low for the last 15 years.
â€˘ 85.89: the falling trend line from May 5th top on the daily chart
â€˘ 86.95: Jul 1st low.
â€˘ 87.56: Jul 20th high.
The Pound broke the support specified in yesterdayâ€™s report, 1.5660 and
dropped hard to successfully reach our suggested target of 1.5549. with
this drop, the Pound has sailed away from the all important 1.5728, and
therefore, the technical outlook is now negative, without a doubt, and
based on several factors which are: 1. The extremely accurate top at
1.5728, 2. Breaking the rising trend line from last weekâ€™s high & 3.
Yesterdayâ€™s drop to a 6-day low. Short term support is at 1.5558, if
broken, we expect a strong drop which will look a lot like yesterdayâ€™s
fall. The targets for such a drop will be the important 1.5438, then
1.5344. Resistance is at 1.5655, and only with a break here that we will
change our negative outlook. If we get this break, things will change,
and we will be on the way yet to another test of the important 1.5728
level, and if broken we will shoot for 1.5854. But, as long as we are
below 1.5655, things are negative for this weak pair.
â€˘ 1.5558: the rising trend line from yesterdayâ€™s low on intraday charts.
â€˘ 1.5438: short term Fibonacci 61.8% support.
â€˘ 1.5344: Sep 10th low, a well known support area.
â€˘ 1.5655: Fibonacci 61.8% for the drop from Fridayâ€™s top.
â€˘ 1.5728: Fibonacci 61.8% for the whole drop from Aug 6th top.
â€˘ 1.5854: Aug 4th low.
trading analysis written by Munther
Marji for Forexpros.
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