Daily Analysis – 18/11/2009

Forexpros Daily Analysis Nov. 18, 2009

Fundamental Analysis, UK

The UK National Statistics Bureau will publish the monthly Retail Sales measurement Tomorrow (Nov 19).
Retail Sales are a measurement of all goods sold by retailers based on a sampling of retail stores of different types and sizes in the UK.
It is an important indicator of consumer spending and also correlated to consumer confidence and considered as a pace indicator of the UK economy.
A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.
Analysts expect tomorrow’s measurement to stand at 0.60%, a slight increase from last month.

For analysis on GBP/USD and other currencies see Forexpros.

Euro Dollar

As expected, the Euro dropped after breaking 1.4934, reaching the first suggested target 1.4879 successfully, and getting close somehow to the second target and important level 1.4786. This behavior only gave us more confidence in the importance of 1.4786, where there is Fibonacci 61.8% for the up-move from 1.4625 to 1.5047, especially with the rising trendline from August 17th low, approaching this level. Short-term support is nearby at 1.4876, a break here would target Fibonacci 61.8% for the rising move from yesterday’s low which is at 1.4839. This is the last notable support before the all important 1.4786. The technical outlook for the short-term will not turn positive before breaking Fibonacci 61.8% for the drop from Monday’s top at 1.4935. If this happens, the Euro will bounce to 1.4998 first, and if we can break this level, we have the right to wait for 1.5082 for the first time this year.

• 1.4876: short-term support.
• 1.4839: Fibonacci 61.8% for the short-term.
• 1.4786: Fibonacci 61.8% for the rising move from 1.4625, the most important support for the medium-term.

• 1.4935: short-term Fibonacci 61.8%.
• 1.4998: intraday top from Monday.
• 1.5082: previous resistance from 2008.


Dollar-Yen broke both the support & resistance specified in yesterday’s report without being able to create any large moves in both cases. Now, the price is trying hard to hold above 89, where Fibonacci 61.8% for the short-term is at 89.01. If this level holds, we will see an upward correction, while breaking this level in specific indicates a continuation of the downside movement towards 88.13, which is the last important support before the last 15 years low 87.10. As for the resistance, the most important for short-term is November 11th low 89.23, breaking it would initiate a correction that would ideally target 89.87. This level is the most important resistance at the moment, and a candidate to initiate a new down move (of course that is in case we get there), only breaking this level would change our expectations to the upside, when we target 90.73.

• 88.90: obvious support on the hourly chart.
• 88.13: Oct 13th low.
• 87.10: Jan 12th low.

• 89.27: Nov 11th low.
• 89.87: Fibonacci 61.8% for short-term.
• 90.73: intraday top.

Analysis by Forexpros – Written by Munther Marji.

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