Forexpros Daily Analysis - 31/03/2010

ForexPros Daily Analysis March 31, 2010


Fundamental Analysis: Initial Jobless Claims

Traders of the US anticipate the publication of the Initial Jobless Claims.
This is a seasonally adjusted measure of the number of people who file for
unemployment benefits for the first time during the given week. This data is
collected by the Department of Labor, and published as a weekly report. The
number of jobless claims is used as a measure of the health of the job
market, as a series of increases indicates that there are fewer people being
hired. On a week-to-week basis, claims are quite volatile. Usually, a move
of at least 35K in claims, is required to signal a meaningful change in job
growth.
A higher than expected reading should be taken as negative/bearish for the
USD, while a lower than expected reading should be taken as positive/bullish
for the USD. Analysts predict a future reading of 440.00K.

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Euro Dollar

The Euro continued to rise from last week's low, Friday's low, and the
10-month low 1.3266, reaching a new top for this correction at 1.3535, from
which it dropped strongly for more than 150 pips. The collapse which
happened late last week is completely expected, not only that, but we
believe what we have seen yet is just part one of a strong and massive
medium term drop which has already started! We will not be a bit surprised
when we see the Euro below 1.30 in the near future, on the contrary, we look
forward with eager to that. But after dropping from 1.38 to 1.32 in a few
days, a rising correction is normal & logical thing and holds no surprises.
Thus, we should focus of the projected targets for this correction, the most
important of which is the Fibonacci 61.8% resistance at 1.3606. Adding
importance to this level is the fact that the long term descending trend
line is getting closer and closer to it. As for the short term, we see
resistance at 1.3441, and if broken, we will continue to correct the last
wave down from 1.38. Ideal targets for such a correction are 1.3541 & the
level with continuous rise in its importance 1.3606. As for the support it
is at 1.3369 and breaking it would indicate a continuation of the drop from
yesterday's top 1.3535. We do expect large targets to be met for the short
term, such as 1.3283 & 1.3190.

Support:
* 1.3369: the bottom of the rising trend line from 1.3266 on hourly charts.
* 1.3283: Thursday's low.
* 1.3190: Apr 30th low.

Resistance:
* 1.3441: Fibonacci 38.2% for the drop from yesterday's top.
* 1.3541: Fibonacci 50% for the drop from 1.3816.
* 1.3606: Fibonacci 61.8% for the drop from 1.3816.

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USD/JPY

Dollar-Yen broke the resistance specified in yesterday's report 92.68, and
successfully reached the first suggested target 93.20, in a move in the same
direction of the technical outlook which followed the break of the falling
trend line on the daily chart, which we have talked about several times
recently. Before reaching 93, the technical outlook was positive, and after
reaching 93, the technical outlook is still positive. But, as we approach
the important top 93.75, we recommend caution of a possible drop. Since it
is pretty important, we will take 93.75 to be our "resistance of the day",
and we do not expect this "correctionless" rise to continue unless it is
broken. But if it does, the price will jump above 94 for the first time
since August, targeting 94.35 and may get a taste of 95 as it targets 95.05.
As for the support it is at 93.00, and breaking it would mean that the price
has settled for a top at 93.58, for the time being at least, and that we
will now correct the big rise we just saw.

Support:
* 93.00: Fibonacci 38.2% for the short term.
* 92.13: Feb 19th low.
* 91.49: Fibonacci 38.2% for the rise from 88.12.

Resistance:
* 93.75: Jan 8th high.
* 94.35: Aug 4th low.
* 95.05: Aug 24th high.

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Forex Trading Analysis written by Munther Marji for ForexPros.

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