Forexpros Daily Analysis Sep 23, 2009
As expected, the Euro reached 1.48 for the first time this year, and also reached the first target suggested in yesterday's report, which leaves the second target 1.4901 ahead of us, could we see it today? The current advance is still climbing (slowly we might add) without showing exhaustion, and the top of the current channel is at 1.49, these thing support the probability of going up. On the other hand, a divergence case on the RSI is developing as we speak, supporting the opposite scenario. These mixed signals could go in harmony if we manage to go up to 1.4901 first then go down to solve the divergence. The most important resistance for short-term is 1.4824, and breaking it is the key to hit 1.4901. the most important support for the short-term is 1.4783, and breaking it would threaten the Euro with a drop to the important 1.4698. Only if we break this support we can start talking about the big correction for the whole move up from 1.4176, because such a discussion before that break would be completely premature.
• 1.4783: short-term support.
• 1.4698: Fibonacci 61.8% for short-term (for the rise from 1.4610).
• 1.4646: Friday's low, and the support area that showed strength recently.
• 1.4824: previous daily high.
• 1.4901: previous daily high.
• 1.4962: previous daily high.
The Dollar-Yen broke the support area 91.60-91.63 to go back into the negative territory again, and to drop more than 110 pips after the break. With that, we came to the end of the rising adventure that stopped at 92.50, and the downtrend came back to dominate. But, stopping near the support 90.51and holding above it, means that there is an existing possibility for another rise, without breaking 90.51. If price manages to hold above this support, there would be a good chance to test a number of important resistance levels most important of which is 91.74. we prefer waiting for a break of 91.74 or 90.51, since we believe that breaking any of those levels will decide the direction of the next move. If we break 91.74, we would be on the road again to 92.50. And if we break 90.51 the downside pressure will come back to drive the price gradually to test (and may be break) the psychological level 90, and to move towards targets below it, first of which is the important support area 89.68-89.78.
• 90.51: the previous support that stopped the current drop.
• 90.11: Sep 16th low.
• 89.68/78: important support area containing the lows of Feb 11th, 12th & Dec 29th 08.
• 91.25: Fibonacci 38.2% for the short-term.
• 91.74: Fibonacci 61.8% for the short-term.
• 92.70-92.80: previous support area which contains a number of daily lows in the past few months.
Forex trading analysis by Forexpros – Written by Munther T. Marji
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