Forexpros Daily Analysis - 07/09/2010
ForexPros Daily Analysis September 07, 2010
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Euro Dollar
We wondered in yesterday’s report, if the Dollar was able to survive after reaching critical levels at 1.2920 for the EURUSD, and 1.5490 for the GBPUSD. The answer to our wondering was “Yes we can”. Although the price did not reach far enough to break yesterday’s resistance or support, but it fell heavily during the Asian session. Yesterday’s rise was halted accurately at the resistance we specified 1.2920, and only 4 pips below it, confirming its massive importance. Then, we dropped to 1.2786, before bouncing once again above 1.28. With this drop, the Euro has broken 2 important trend lines on the hourly charts: the rising trend line from Aug 31st (which was broken at 1.2860), and then the falling trend line from Sep 1st top. This has shifted the short term technical outlook to the negative territory, but the medium term gloomy outlook is sleeping until we break 1.2777, and we wake her beauty up! That is why, today’s support will be 1.2777, and if broken, we expect the current fall to continue, targeting 1.2690 first, and then 1.2627. On the other hand, resistance is at 1.2864, and if broken, the Euro will rise after the Asian session breakdown, and will target 1.2943 & 1.3000.
Support:
• 1.2777: last week’s top, Aug 27th high, an obvious hourly support. The single most important short term support without a shadow of a doubt.
• 1.2690: obvious & attractive horizontal support on the hourly chart.
• 1.2627: Aug 31st low.
Resistance:
• 1.2864: Fibonacci 61.8% for the drop from yesterday’s high.
• 1.2943: the top of the rising trend channel on the hourly chart.
• 1.3000: psychological level.
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GBP/USD
The Pound dropped from the very same area which stopped it on Sep 1st, the all important resistance 1.5480/90. It fell to break the support specified in yesterday’s report 1.5442, and successfully and accurately reaching our suggested target 1.5349, stopping only 5 pips below it. Today, we expect more of the same, and we expect a serious break of the support at 1.5349, resulting in a continuation of the drop from the massive 1.5490! if the price manages to do so, we will be expecting another episode of “the drop” series, a lot like yesterday’s. This drop will target 1.5262 at the very least, and at a later time 1.5151. On the other hand, the most important resistance is still at 1.5480/90, but there is a short term resistance “guarding” it, which is short term resistance 1.5433. if broken, the Pound will reverse direction, and refuse our negative outlook, and will be on the way to yet another (a third) test, of the all important 1.5480/90, and if we pass by it, 1.5565 will be the target.
Support:
• 1.5349: Thursday’s low.
• 1.5262: Jul 5th high.
• 1.5151: the rising trend line from Friday’s low on intraday charts.
Resistance:
• 1.5433: Fibonacci 61.8% for the drop from yesterday’s high.
• 1.5490: the top of the resistance area formed between Fibonacci 61.8% short term & Sep 1st high.
• 1.5565: the falling trend line from Aug 16th high.
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Forex trading analysis written by Munther Marji for Forexpros.
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