ForexPros Daily Analysis March 2, 2010
Fundamental Analysis: ADP Nonfarm Employment Change
Traders of the US anticipate the publication of the ADP National Employment Report tomorrow March 2. The report measures the monthly change of nonfarm private employment, based on a subset of aggregated and anonymous payroll data that represents approximately 400,000 U.S. business clients. This release, 2 days before the government-released employment data, is a good predictive to the government’s non-farm payrolls data. The change in this indicator can be very volatile. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. Analysts predict a reading of -10.00K.
The Euro stopped only 4 pips above the resistance specified in yesterday’s report 1.3648, and fell hard, breaking the support 1.3589, and successfully reaching the first suggested target 1.3496. It also came sort of close to the second target 1.3442 (yesterdays low was 1.3459). We note on the attached chart that yesterday’s low came very close to the trend line slowly rising from 1.3422, to the extent that it could be considered as a 3rd touch of the line. Thus, this line has gained more importance. Usually, when the price stops and creates a series of bottoms that are so close to each other (1.3442, 1.3450 & yesterday 1.3459), and provides us a slightly rising trend line as it is the case, a break of this line will result in a big move on the medium term, and this is to be expected here. A break of this line could result in a move approaching 1.30 in a very few weeks. For the short term, the above mentioned line provides support at 1.3465, and if it gets broken, we see the Euro falling to 1.3390 & 1.3299. The resistance is provided by Fibonacci 61.8% for the short term at 1.3578, and if broken the Euro will catch a breath, and jump to 1.3652, and may be 1.3740.
• 1.3465: the slightly rising trend line from 1.3422.
• 1.3390: Apr 13th high.
• 1.3299: Apr 24th high.
• 1.3578: Fibonacci 61.8% for the short term.
• 1.3652: important resistance level on hourly charts.
• 1.3740: previous well known resistance area.
Not a lot of motion in the past 24 hours, it seems that this pair is still building a base, in a step to change short term direction. Today, we see the Dollar-Yen trying to break the falling trend line from 89.48 on the intraday charts. If it succeeds in doing so, we will be in front of a new trend in a new week. This trend line is very close to the resistance 89.39, and that is why this resistance will be resistance of the day. Breaking it would indicate this pair is targeting the short term Fibonacci retracement levels, and the major 3 levels are at 90.02, 90.43 & 90.83. We picked the first and last of them as targets for the 89.39 break. As for the resistance 88.81 has shown strength so far (please refer to the attached chart). We will adopt it as support of the day, and if it is broken, we ill not get out new trend today, the fall will continue, and the next set of targets will be 88.00 & 87.35, most of them are notably important support levels.
• 88.81: Oct 7th low.
• 88.00: Fibonacci 61.8% for the short term.
• 87.35: Dec 9th low.
• 89.39: the slightly falling trend line from 89.48 on the intraday charts.
• 90.02: Fibonacci 38.2% for the drop from 92.31.
• 90.83: Fibonacci 38.2% for the drop from 92.31.
Forex Trading Analysis written by Munther Marji for ForexPros.
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