Thread: Forexpros Daily Analysis - 02/12/2009

Forexpros Daily Analysis Dec 2, 2009


About Wayne:

Mr.McDonell is the Chief Currency Coach at FX Bootcamp, a live forex training organization that teaches traders how to develop conservative trade plans based on technical and fundamental analysis, as well as addressing the psychological aspects of being a trader; all in real-time.

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Interest Rate Decision

The EU Central Bank will announce the new monthly short term interest rate tomorrow (Dec 2nd).
The decision on where to set interest rates depends mostly on growth outlook and inflation. The primary objective of the central bank is to achieve price stability. High interest rates attract foreigners looking for the best "risk-free" return on their money, which can dramatically increases demand for the nation's currency.
A higher than expected rate is positive/bullish for the EUR, while a lower than expected rate is negative/bearish for the EUR.
Analysts expect tomorrow's interest rate to remain stable at 1.00%.

For more on interest rates see Forexpros.

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Euro Dollar

The Euro broke the resistance 1.5050 but settled for 1.5116 only, without reaching the first suggested target 1.5144. This morning it started to fall and get closer little by little to the first important trendline which is currently at 1.5058. We believe that testing this line is only a matter of time. And if the Dollar succeeds in breaking this line, it would put the Euro under pressure, because that break would mean that we are already in a correction for the whole move from 1.4827. Such a correction would take this pair to Fibonacci 50% for the short-term at 1.4972 as a first target, and may be Fibonacci 61.8% at 1.4937 as a second target & an important support. On the other hand, short-term resistance is at 1.5101, and only breaking it would improve the “exhausted” technical outlook. If this break happens, it will target 1.5200 first, and may be 1.5260 later. But, as long as we are below 1.5101 exhaustion will lead this pair downwards to test several support levels and important trendlines.

Support:
• 1.5058: the rising trendline from 1.4827 on the hourly chart.
• 1.4972: Fibonacci 50% for the short-term.
• 1.4937: Fibonacci 61.8% for the short-term.

Resistance:
• 1.5101: important intraday resistance from yesterday.
• 1.5200: resistance area from 2008.
• 1.5260: resistance area from 2008.

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USD/JPY

Dollar-Yen stopped with astonishing accuracy at Fibonacci 61.8% at 87.50, as yesterday’s high was 87.51! Stopping at Fibonacci resistance levels indicates that the trend is still down. This makes us expect that the whole up-move from 84.81 is only a correction, that will ends once we break the rising trend channel, and then the downtrend will come back to search for new lows. Fibonacci 61.8% at 87.50 is still the most important resistance, and if price succeeds in breaking it, then a test of the bottom of the supposed wedge formation at 88.28 is to be expected, and if this important resistance is also broken, the next target will be the top of that formation which is currently at 88.72. today’s support is yesterday’s 86.84, and breaking it would mean a continuation of the downtrend after some rising bounces. That would target the bottom of the rising trend channel from last week’s bottom on the hourly chart, which is currently at 85.84, and if broken we will test 84.81. Fibonacci says the trend is down, and the Yen strength is still expected, but we should be aware of the possibility of interventions by the Japanese government that would left this pair many steps up!

Support:
• 86.84: short-term support.
• 85.84: the bottom of the rising trend channel from last weeks bottom.
• 86.44: last week’s low.

Resistance:
• 87.50: Fibonacci 61.8% short-term (for the move from 89.17 to 84.81).
• 88.28: the bottom of the supposed wedge formation.
• 88.72: the top of the supposed wedge formation.

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Forex Trading Analysis by Forexpros.

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Disclaimer
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 recommendations are subject to change at any time.

Trend is upward, but we dont have any well signals of EURUSD.

Trend is descending, but we dont have any well signals of EURUSD.

Excuse me, previous post was about USDCHF

Trend is upward, but we dont have any well signals of GBPUSD.

USDJPY
Trend is upward, but we dont have any well signals.

EURUSD
Trend is descending, but we dont have any well signals.

GBPUSD
Trend is descending, but we dont have any well signals.

Oil markets have looked to wider economic data and equity markets this year for a sign of a turnaround in the economy that could bolster crude demand and drain high inventory levels in key consumers, such as the United States.

Crude oil stocks at the giant storage hub in Cushing, Okla. -- the delivery point for the New York Mercantile Exchange's oil futures contract -- have swelled, deepening the discount of front-month crude futures to second-month futures.

This market condition, called a contango, encourages more storage onshore and offshore, and drags down prices further.

"Cushing storage are the leading reason January prices (are) lower and the continuing expansion of the contango has traders worries about the likelihood of further increases in floating storage; most on-land storage is already full," said Peter Beutel, president of Cameron Hanover in New Canaan, Conn.

Weekly U.S. inventory data from the American Petroleum Institute, due out later Tuesday, was expected to show a 600,000-barrel build in crude stocks in the week to Dec. 4 and a rise of 1.5 million barrels in gasoline inventories. Weekly data from the U.S. Energy Information Administration was due out on Wednesday morning.

Oil prices have rallied to a high for the year of $82 a barrel, reached in October, from below $33 in December 2008, even though fundamentals of supply, demand and inventories are bearish in the view of many analysts.