Forexpros Daily Analysis - 10/12/2009

Forexpros Daily Analysis Dec 10, 2009


Fundamental Analysis: US Census Bureau

The US Census Bureau will release the Core Retail Sales report tomorrow (Dec 11).
The report is a monthly measurement of all goods sold by retailers based on a sampling of retail stores of different types and sizes in the US, excluding auto. It is an important indicator of consumer spending and also correlated to consumer confidence and considered as a pace indicator of the US economy .
Analysts predict tomorrow's report to indicate a rate of 0.60%, an increase form last month's rate of 0.20%.

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Euro Dollar

The Euro surpassed the resistance 1.4734 without being able to advance, but at the same time, it did not break or approach the support 1.4649. It seems that the fluctuation we have seen has started building a small triangle pattern, with its limits at 1.4734 & 1.4681, and breaking any of these limits is what will set the direction for the short-term. If we break support at 1.4681 we will target Fibonacci 38.2% (for the rise from 1.3747) which is now closer than ever at 1.4610, and then the support area 1.4510/1.4518 that includes several daily bottoms. Short-term resistance is at the supposed triangle pattern limit 1.4734, breaking it would mean that the Euro will have a chance to catch a breath after this big drop. Breaking this resistance will target at least 1.4847, and may be 1.4903 as well.

Support:
• 1.4681: the lower limit for the supposed triangle pattern.
• 1.4610: Fibonacci 38.2% for the long-term (for the rise from 1.374).
• 1.4510: previous support area that includes several daily lows.

Resistance:
• 1.4734: the upper limit for the supposed triangle pattern.
• 1.4847: Fibonacci 38.2% for the drop from 1.5139.
• 1.4903: Fibonacci 50% for the drop from 1.5139.

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USD/JPY

Dollar-Yen broke the support 88.16 and successfully reached the first suggested target 87.78, but stayed relatively far from the second target, and the most important support for now 87.08. The importance of 87.08 will carry on for the rest of the week, since it is Fibonacci 61.8% support for the rise from 84.81. As we can see from the attached chart, the rising move during the Asian session has bumped into the previously broken trendline. And for the technical outlook for the Dollar, we should surpass this line which is currently at 88.25. Therefore, we should wait for a break of the support or resistance before we can predict the direction of short-term. If we break the resistance 88.25 this pair can surprise some by reaching areas above 89 such as 89.17 or 89.70. on the other hand, if the most important support for now 87.08 is broken, the downtrend will continue with confidence, and the next set of targets will be 86.29 & 85.71.

Support:
• 87.08: Fibonacci 61.8% for the whole move from 84.81 to 90.75.
• 86.29: important intraday level on hourly chart.
• 85.71: important intraday level on hourly chart.

Resistance:
• 88.25: broken trendline.
• 89.17: important intraday level on hourly chart.
• 89.70: important intraday level on hourly chart.

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Forex Trading Analysis written by Munther Marji for Forexpros. For real time Forex charts see Forexpros.

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Only about 4% of troubled borrowers have received long-term help under the Obama administration's foreclosure prevention program, Treasury officials said Thursday.

A nearly equal number of trial modifications have been denied permanent assistance, the report showed. The reasons include not making monthly payments on time, not submitting all the necessary paperwork, or not qualifying for reasons such as insufficient income.

The report, the first comprehensive tally of permanent modifications made, shows that loan servicers have converted 31,382 people from trial adjustments to long-term assistance as of Nov. 30.

But 30,650 people in trial modifications have been denied, according to Treasury officials.

A total of 759,058 trial modifications have been started since the program launched in the spring. The number of troubled borrowers currently in trial modifications rose to 697,026, up from 650,994 a month earlier.

NEW YORK (Reuters) -- The U.S. dollar jumped to a two-month high against the euro Friday after surprisingly strong consumer data boosted expectations the Federal Reserve would raise interest rates sooner rather than later.

Retail sales posted the largest advance since August last month, while consumer sentiment improved sharply in early December. The reports stoked optimism about a recovery in the world's largest economy and pushed the euro below $1.46 for the first time since early October.

"The much stronger-than-expected retail sales number has rekindled expectations of a rate hike sooner than anticipated," said Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston. "It does appear that the U.S. consumer has been a little bit more resilient than anticipated."

The prospect of prolonged low U.S. interest rates has undermined the dollar in recent months as investors borrow in the low-yielding greenback and reinvest the money in stocks, commodities and higher-yielding currencies in search of returns. The euro