Forexpros.com Daily Analysis - 25/03/2010

ForexPros Daily Analysis March 25, 2010


Free webinar on ForexPros - Inter-Market Analysis and 2010 Forecast for the
Dollar and Commodities

Expert: Nour Eldeen M. Al-Hammouri
When: Today, Mar 25, 2010, 15:00 GMT

In this webinar Nour Eldeen M. Al-Hammouri will discuss the Inter-Market
Analysis and markets relationships. He will relate to the issue of how to
use Moving Averages to track the best support and resistance area, which
will be a signal for the Buy areas or Sell areas.

Click here to join free.

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Fundamental Analysis: GDP (QoQ)

Traders of the US anticipate the publication of the GDP measurement. The
Gross Domestic Product (GDP) is the broadest measure of economic activity
and is a key indicator for the economy's health.
The Annualized (quarterly change x4) percent changes in GDP shows the growth
rate of the economy as a whole.
Consumption is by far the largest component in the GDP of the US and has the
most affect on it.
The figures can be quite volatile from quarter to quarter. A higher than
expected reading should be taken as positive/bullish for the USD, while a
lower than expected reading should be taken as negative/bearish for the USD.
Analysts predict a future reading of 5.90%.

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Euro Dollar

The Euro broke the support specified in yesterday's report 1.3390 , and
dropped reaching the first suggested target 1.3326 successfully, before
dipping below 1.33 for the first time since May 7th of last year. This
collapse is completely expected, not only that, but we believe what we have
seen yet is just part one of a strong and massive medium term drop which has
already started! We will not be a bit surprised when we see the Euro below
1.30 in the near future, on the contrary, we look forward with eager to
that. As for the short term, we may see a correction that retests the
support area 1.3434-1.3462 before the weekend, and we may not! This depends
on breaking the short term support or resistance. We see resistance at
1.3459, and the EURUSD will stay harmed, trading under a very negative
technical outlook as long as we are below this resistance. But if a surprise
takes us above this level, we will correct the last wave down from 1.38.
Ideal targets for such a correction are 1.3550 & 1.3612. As for the support
it is at 1.3303 and breaking it would indicate a continuation of the drop.
We do expect large targets to be met before the weekend, such as 1.3190 &
1.3088.

Support:
* 1.3303: important intraday support.
* 1.3190: Apr 30th low.
* 1.3088: Apr 10th low.

Resistance:
* 1.3459: Fibonacci 61.8% for the short term.
* 1.3550: Fibonacci 50% for the drop from 1.3816.
* 1.3612: Fibonacci 61.8% for the drop from 1.3816.

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USD/JPY

After days & days of putting it under our surveillance, and pouring all our
attention on it, the "magnetic" resistance 90.78 was broken and we have seen
what follows the break of such important levels. The Dollar jumped strongly
breaking the specified resistance in yesterday's report 90.78 & successfully
reaching both suggested targets 91.60 & 92.31, stopping only 7 pips above
the second target! With this break, the Dollar has released itself from
pressure, and the direction of the Dollar in this pair could now agree with
its direction against the European currencies, and we could end up seeing a
board Dollar rally against all majors. After this rocketing rise, a
correction is normally expected, and here, the previous critical resistance
90.78 has turned to a support that the price should hold above. Short term
support is at 91.40 & breaking it would indicate a drop to 90.78 to retest
it. If price holds above it, or at least close to it, there will be no harm.
But it we go back below this level, the positive technical outlook will get
hit hard, and price will drop towards 89.99. As for the resistance it is at
92.09 & if broken, the current rise will continue, and the Dollar will rise
to a new set of targets which includes: 93.20 & 93.75.

Support:
* 91.40: short term 38.2% Fibonacci support.
* 90.78: the previous important resistance, and Fibonacci 61.8%.
* 89.99: the rising trend line from 89.61 on the hourly chart.

Resistance:
* 92.09: the falling trend line from yesterday's top.
* 93.20: Jan 4th high.
* 93.75: Jan 8th high.

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Forex Trading Analysis written by Munther Marji for ForexPros.

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