Fundamental Analysis: Fed Chairman Bernanke Speaks
Traders of the US look forward to the Fed Chairman Bernanke Speech tomorrow June 9. The Fed Governor Ben Shalom Bernanke was born in 1953. He graduated from Harvard University and a Ph.D. in economics in 1979 from the Massachusetts Institute of Technology. In 2006 he became the Chairman of the Federal Reserve System. His comments may determine a short-term positive or negative trend.
With astonishing accuracy, the Euro’s drop stopped at the support specified in yesterday’s report 1.1911, down to the pip! And then tried to reach 1.20, but it settled for 1.1989. Breaking below 1.20 on Friday has opened the door for guessing the long term targets in these areas, the question now is where are these targets? In our opinion, we believe that there is one target, one point, which stands out of the crowd, and that is 1.1211, which will be our target for the next few weeks. The importance of this level is that it is the 61.8% Fibonacci for the whole move from the historical low to the historical high. For the short term, the wave count illustrated on the chart, shows a 4-wave drop, in which yesterday’s “break” is wave 4, and we still have room for another leg down below 1.1875, in what would be wave 5. Short term support is at 1.1932, and if broken the Euro will continue its drop to 1.1825, and then 1.1754. The resistance is at 1.1984, and breaking it will give the chance for the Euro to catch a break, and rise to the important 1.2085 & 1.2155.
• 1.1932: the rising trend line from yesterday’s low on intraday charts.
• 1.1825: Feb 27th 2006 low.
• 1.1754: Dec 6th 2005 low/
• 1.1984: important intraday level.
• 1.2085: Fibonacci 61.8% for the last drop from 1.2214.
• 1.2155: the top of the falling channel on the 4-hour chart.
The Dollar/Yen held above the support specified in yesterday’s report 90.90 (yesterday’s low was 90.96), and it rose to break the resistance 91.59, and stopped before the suggested target 92.15 with only 8 pips! This surely indicates the importance of this level, which we will adjust today with a single pip to 92.14. This resistance will be in the center of our attention. On the other hand, the support is at 91.54, provided by the rising trend line from 90.96 on the hourly chart. If the price manages to hold above this support, we believe in its ability to test Friday’s top and the important 92.95, if not today, then later in the week. But definitely, we need a break of 92.14 first, and if e get what we need, then the price will be on the way to test the important 92.95 first, then 93.70. But if the price retreats, and broke the rising trend line (currently running at 91.54), we will drop to the important Fibonacci levels: the important 90.90, and the more important 90.44.
• 91.54: the rising trend line on the hourly charts.
• 90.90: Fibonacci 50% level for the rising move from 88.96.
• 90.44: Fibonacci 61.8% level for the rising move from 88.96.
• 92.14: Fibonacci 61.8% for the short term.
• 92.95: May 18th high.
• 93.70: Apr 14th high.
Forex Trading Analysis written by Munther Marji for ForexPros.
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