Daily Analysis – 10/12/2009

Forexpros Daily Analysis Dec 10, 2009

Fundamental Analysis: US Census Bureau

The US Census Bureau will release the Core Retail Sales report tomorrow (Dec 11).
The report is a monthly measurement of all goods sold by retailers based on a sampling of retail stores of different types and sizes in the US, excluding auto. It is an important indicator of consumer spending and also correlated to consumer confidence and considered as a pace indicator of the US economy .
Analysts predict tomorrow’s report to indicate a rate of 0.60%, an increase form last month’s rate of 0.20%.

Euro Dollar

The Euro surpassed the resistance 1.4734 without being able to advance, but at the same time, it did not break or approach the support 1.4649. It seems that the fluctuation we have seen has started building a small triangle pattern, with its limits at 1.4734 & 1.4681, and breaking any of these limits is what will set the direction for the short-term. If we break support at 1.4681 we will target Fibonacci 38.2% (for the rise from 1.3747) which is now closer than ever at 1.4610, and then the support area 1.4510/1.4518 that includes several daily bottoms. Short-term resistance is at the supposed triangle pattern limit 1.4734, breaking it would mean that the Euro will have a chance to catch a breath after this big drop. Breaking this resistance will target at least 1.4847, and may be 1.4903 as well.

• 1.4681: the lower limit for the supposed triangle pattern.
• 1.4610: Fibonacci 38.2% for the long-term  (for the rise from 1.374).
• 1.4510: previous support area that includes several daily lows.

• 1.4734: the upper limit for the supposed triangle pattern.
• 1.4847: Fibonacci 38.2% for the drop from 1.5139.
• 1.4903: Fibonacci 50% for the drop from 1.5139.


Dollar-Yen broke the support 88.16 and successfully reached the first suggested target 87.78, but stayed relatively far from the second target, and the most important support for now 87.08. The importance of 87.08 will carry on for the rest of the week, since it is Fibonacci 61.8% support for the rise from 84.81.  As we can see from the attached chart, the rising move during the Asian session has bumped into the previously broken trendline. And for the technical outlook for the Dollar, we should surpass this line which is currently at 88.25. Therefore, we should wait for a break of the support or resistance before we can predict the direction of short-term. If we break the resistance 88.25 this pair can surprise some by reaching areas above 89 such as 89.17 or 89.70. on the other hand, if the most important support for now 87.08 is broken, the downtrend will continue with confidence, and the next set of targets will be 86.29 & 85.71.

• 87.08: Fibonacci 61.8% for the whole move from 84.81 to 90.75.
• 86.29: important intraday level on hourly chart.
• 85.71: important intraday level on hourly chart.

• 88.25: broken trendline.
• 89.17: important intraday level on hourly chart.
• 89.70: important intraday level on hourly chart.

Forex Trading Analysis written by Munther Marji for Forexpros. For real time Forex charts see Forexpros.

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