ForexPros Daily Analysis June 17, 2010


Fundamental Analysis: BoC Gov Carney Speaks

Canadian traders await the speech by governor Carney, to take place tomorrow, June 18th. Mark Carney, Bank of Canada governor, 2008-2015. As head of Canada's central bank, which controls key short term interest rates, Carney has more influence over the Canadian dollar's value than any other person. Traders scrutinize his public engagements for clues regarding future monetary policy. His comments may determine a short-term positive or negative trend.

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Euro Dollar

With stunning accuracy, The Euro’s rising move stopped at the resistance specified in yesterday’s report 1.2352 (yesterday’s high was 1.2351), and then, just as expected, the drop began. The price then broke the support specified in yesterday’s report 1.2307, only to settle for 1.2253! The rising move halted very close to this month’s top, which was reached on the first day of it: 1.2352. This proves how important this resistance is, that is why it will be our resistance of the day, especially after it managed to send the price down for almost 100 pips. This retreat, from a well known resistance & a target area means that the “hot” rise for the Euro is going cold! If we break the short term support 1.2255, the Euro will probably give up the latest gains. And it will target the ideal correction targets for the whole rise from 1.1875, which are 1.2169 & 1.2057. On the other hand, the resistance is at 1.2352, and as long as we are below it, dropping more & more from yesterday’s top will be expected. But if we break it, we will target the important 1.2452, and later 1.2519.

Support:
• 1.2255: Asian session low.
• 1.2169: Fibonacci 38.2% for the whole rising move from last weeks low to yesterday’s high.
• 1.2057: Fibonacci 61.8% for the whole rising move from last weeks low to yesterday’s high.

Resistance:
• 1.2352: June 1st high.
• 1.2452: the descending trend line from Apr 14th high.
• 1.2519: May 6th high.

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USD/JPY

With supernatural accuracy, the Dollar/Yen stopped at the support specified in yesterday’s report 91.06 (yesterday’s low was 91.07), and traded above it for the whole time after. Stopping here is in fact a test at the ascending trend line from May 20th low, a very accurate test actually (please refer to the attached chart). This makes this support the single most important support without a shadow of a doubt! This line is currently running at 91.17, and it will be our support of the day. And after such an accurate test, we suggest keeping an eye on this pair, because this very test is what will determine and set the short term direction. If we break 91.17 the price will drop hard, to 89.81 first, and then to 88.96, both levels are significant and critical support levels. The resistance is provided by the falling trend line from this week’s high, which is at 91.65. If we break this resistance, we will be capable of penetrating 92.07 which stopped us a couple of times, and we will target 92.56 & 93.38. It seems like we are going to enjoy an exciting end to this week with the USDJPY.

Support:
• 91.17: the rising trend line from May 20th low. The single most important support for the short term.
• 89.81: May 26th low.
• 88.96: May 20th low.

Resistance:
• 91.65: the falling trend line from Monday’s top.
• 92.56: Apr 13th low.
• 93.38: Jan 7th high.

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Forex trading analysis written by Munther Marji for Forexpros.

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