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Forexpros Daily Analysis - 11/08/2010

Discussion in 'Market Predictions and Reports' started by Forexpros2, Aug 11, 2010.

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    Oct 12, 2009
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    ForexPros Daily Analysis August 11, 2010

    Free webinar on ForexPros - How to Objectively Use Sentiment in Your Forex
    Trading to Start Winning
    Expert: Kris Matthews
    When: Thu, August 12, 2010, 11:00a.m. GMT

    Have you ever put a trade on after seeing the market run nicely in one
    direction only to see the market immediately move in the opposite direction?
    Do you find that getting the direction right is something you need to take
    care of? What most traders tend to forget is that the market is not made up
    of charts and economic data, but rather human beings. Thus the most powerful
    driving force in the forex market is sentiment. Kris Matthews shows us in
    Part 1 of a four part series how to objectively use sentiment to get your
    direction right and increase your win rate.

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    Fundamental 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
    On 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.
    A higher than expected reading should be taken as negative/bearish for the
    USD, while a lower than expected reading should be taken as positive/bullish
    for the USD. The analysts predict a future reading of 465.00K.


    Euro Dollar

    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 falling trend.
    Therefore, unless the price goes back up to trade above the broken trend
    line, we expect more downside activity. Short term support is at 1.3032,
    which we are trading just above at the moment. If broken, the price will
    drop targeting the important Fibonacci level 1.2961, and if broken 1.2875.
    On the other hand, resistance is at 1.3158, and if broken, this pair will
    contradict all what we have said, and will shoot up to 1.3255, and may be

    * 1.3032: Fibonacci 61.8% for the whole rising move from 1.2731 to Friday's
    & 3-month high.
    * 1.2961: Fibonacci 61.8% for the whole rising move from 1.2731 to Friday's
    & 3-month high.
    * 1.2875: Jul 26th low, a well known support/resistance area.

    * 1.3158: short term 61.8% Fibonacci level.
    * 1.3233: the retest level for the broken trend line.
    * 1.3347: May 3rd unforgettable top.


    The Dollar/Yen 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
    attached chart, 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
    currently, providing 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.
    * 83.87: Fibonacci extension level 138.2% for the falling wave from 86.86,
    compared to 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 chart.

    * 85.81: short term Fibonacci 61.8% level .
    * 86.43: the top of the rising corrective trend channel on the hourly chart.
    * 87.49: Jul 29th high.


    Forex trading analysis written by Munther Marji for Forexpros.



    Trading Futures and Options on Futures and Cash Forex
    transactions involves substantial risk of loss and may not be suitable for
    all investors. You should carefully consider whether trading is suitable for
    you in light of your circumstances, knowledge, and financial resources. You
    may lose all or more of your initial investment. Opinions, market data, and
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