Forexpros Daily Analysis - 17/02/2010


ForexPros Daily Analysis February 17, 2010

Free webinar on ForexPros - Mapping Out the Banking System & Foreign Exchange Dealing Process, Part II.

Expert: Dan Cook
When: Wed, Feb 24, 2010, 11:00 EST

In the second installment of the Webinar ‘Mapping Out the Banking System & Foreign Exchange Dealing Process’, Dan Cook will take a deeper dive into the Foreign Exchange Market. Cook will start by discussing the interbank system and how it differs in form and functionality to the centralized exchange models used for trading stocks and commodities. From there, he will focus on broker-level dealing and discuss how retail brokers, whether ECN's or Dealing Desk models, make money.

Cook will also take an inside look at dealing desks and speak frankly about the roles and responsibilities of a retail dealing desk, which will include an overview of how brokers hedge currency exposure. The goal of this Webinar is to help traders understand the nuances of the Forex market by shedding light on many of the aspects of currency trading that have previously been shrouded in mystery.

Click here to join free.


Fundamental Analysis: BOJ Press Conference

The Bank of Japan will be holding a press conference, their preferred method of communicating with investors. Topics at such conferences generally include economic outlook, inflation and changes in interest rates.


Euro Dollar

The Euro broke the resistance 1.3720 and successfully and accurately reached the first suggested target 1.3778 (the high until the moment of preparing this report is 1.3780). This break moves the importance to the most important Fibonacci resistance for the short term at 1.3836, where we see a double importance for today. Breaking this level would indicate that the Euro has broken free from pressure and downtrend (for the short term at least), and we will await any signals of a direction change for the medium term. Short term resistance is at 1.3778 and we are trading pips below it now. If it is broken, we would target a test of the most important 1.3836, and if broken, we would target 1.3911 as a first, temporary, modest target on the way higher. Short term support is at 1.3740 and if broken, The Euro would settle for a 1.3780 as a short term top, and a drop would already be underway, targeting 1.3685 & 1.3626.

• 1.3740: an obvious support on the hourly chart.
• 1.3685: Fibonacci 38.2% for the short term.
• 1.3626: Fibonacci 61.8% for the short term.

• 1.3778: Fibonacci 50% for the last drop from 1.4025.
• 1.3836: Fibonacci 61.8% for the last drop from 1.4025.
• 1.3911: Jan 29th low.



The Dollar-Yen maintained trading above the support specified in yesterday’s report 89.70 (the low after issuance of the report was 89.77), and it rose modestly to break 90.22 and only reaching 90.49. This behaviour is a continuation for the slow advancement activity that we have seen recently, which as it is shown on the chart, is trading inside a slowly rising channel. As long as we are trading inside this channel we expect more of the same. The bottom of the channel is at 89.90 and this is the most important support for the short term. If broken, a drop will be initiated targeting 89.12 & 88.23 all over again. The resistance is at Jan 26th & 28th top 90.53, and breaking it would indicate that this rising trend will accelerate, targeting Fibonacci levels 91.14 & 91.76 all over again.

• 89.90: the bottom of the rising channel on the hourly chart.
• 89.12: Jan 27th low.
• 88.23: Fibonacci 61.8% for the whole move from 84.81 to 93.75.

• 90.53: Jan 26th & 28th highs.
• 91.14: Fibonacci 50% for the whole drop from 93.75.
• 91.76: Fibonacci 61.8% for the whole drop from 93.75.


Forex Trading Analysis written by Munther Marji for ForexPros.

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