Forexpros Daily Analysis Dec 29, 2009



Fundamental Analysis: KOF Leading Indicators

Traders of CHF await the publication of the KOF Leading Indicators tomorrow (Dec 30).
The KoF Leading Indicators Index determines overall economic health by combining 12 indicators related to consumer confidence, banking confidence, production, new orders and housing.
It indicates the economic trend and the movement of GDP growth in Switzerland.
A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.
Analysts predict a reading of 1.62, down from the previous 1.80.

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Euro Dollar

The Euro came back to test the resistance specified in yesterday’s report 1.4410 for the second time, after testing it previously on Thursday. But it stopped accurately at this level (yesterday’s high was 1.4412). The technical outlook is still gaining positivity after breaking the falling channel that we talked about all last week, but failure at 1.4410 might be the first signal indicating a new wave of weakness. And since it is an important resistance, we will consider as resistance of the day, and breaking it would confirm the upward direction that started by breaking the descending channel. Short-term support is Thursday’s resistance 1.4371, and if this important level is broken, this pair would target the important 1.4292 (important for short term and may be medium term as well), and then 1.4233. A break of today’s most important resistance 1.4410 would cause a jump to 1.4502, and later to Fibonacci 38.2% for the medium-term 1.4596.

Support:
• 1.4371: Thursday’s resistance that became today’s short term support.
• 1.4292: Fibonacci 61.8% short term and it is close to the rising trend line from last week’s low on intraday charts.
• 1.4233: important intraday support from last week.

Resistance:
• 1.4410: previous well known resistance, price stopped near it twice on Thursday, and then again yesterday.
• 1.4502: Dec 15th low.
• 1.4596: Fibonacci 38.2% for the medium term (for the whole move from 1.5139 to 1.4260).

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USD/JPY

Though it tried more than once, the Dollar-Yen could not break 91.78, and that is why there is almost no change to the technical outlook we spoke about yesterday. The price is invited to show strength against the resistance 91.78 (the high until the moment of preparing the report is 91.76), and if broken, a test of the area that caught our attention 92.31-92.52 will be only a matter of time. And if this area is broken, the Dollar will take off, towards March 19th low 93.53. On the other hand, if the price fails to create a sustained break of 91.78, a drop towards 90.90 where the rising trend line from 84.81, will follow. And if this level is broken, the price will drop towards the important 90.03, and if broken we are to see 89.55.

Support:
• 90.90: the rising trend line from 84.81.
• 90.03: Fibonacci 61.8% for the whole move from 88.91 to 91.85.
• 89.55: previous important intraday low.

Resistance:
• 91.78: Jul 8th low.
• 92.31-92.52: resistance area created between Oct 27th & Sep 21st tops.
• 93.53: Mar 19h low.

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Forex trading by Munther Marji for Forexpros. See Forexpros for Forex fund managers and trading tools.

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