ForexPros Daily Analysis February 9, 2010
Fundamental Analysis: Fed Chairman Bernanke Testifies
US traders look forward to Ben Bernanke, US Federal Reserve Chairman, who will be testifying in Washington DC, regarding America’s economic outlook and financial markets.
His comments may determine a short-term positive or negative trend.
The Euro kept trading above the support 1.3620, and started to rise, breaking the resistance 1.3666, and reaching 1.3728 until this moment without reaching the target 1.3752. As we said yesterday, with Friday’s move taking us close to the channel bottom, and then a fast bounce reaching 1.3666, the odds of an upside correction remains present, but we need a break of 1.3745 before we can say the odds favor that. Short-term resistance is at 1.3745, and breaking it would indicate that the price is already moving higher after the drop we witnessed last week, even if that was only for a short term correction. The targets for such a correction would be 1.3805 & 1.3857. While the support is at 1.3666, and breaking it would bring back Friday’s target under the spotlight: 1.3582 & 1.3516.
• 1.3666: the rising trend line from 1.3584 on intraday charts.
• 1.3582: Apr 6th high.
• 1.3516: Apr 2nd high.
• 1.3745: important intraday resistance.
• 1.3805: Fibonacci 50% for the last drop from 1.4025.
• 1.3857: Fibonacci 61.8% for the last drop from 1.4025.
Dollar-yen did not break any of the important levels specified in yesterday’s report, and kept trading in a relatively tight range without any major moves that have any influence on the technical outlook, leaving the technical outlook hardly changed. What is worth mentioning is that we are getting closer to long term Fibonacci 61.8% support at 88.23 (Thursday’s low 88.53), and there is no doubt that this level is the most important support in these areas. As for the short term, the support is at 89.23, and breaking it would indicate a movement to test the most important support 88.23, and if broken the first target would be 87.35. Short term resistance is at 89.87, and breaking it would indicate that the Yen has settled for closing on 88.23 without reaching it, and that we are correcting yesterday’s drop, or may be the whole drop from 93.75, which might be over close to the Fibonacci support. Such a correction would have ideal targets at 91.14 & 91.76.
• 89.23: the rising trend line from Thursday’s low on intraday charts.
• 88.23: Fibonacci 61.8% for the whole move from 84.81 to 93.75.
• 87.35: Dec 9th low.
• 89.87: Fibonacci 50% for the short term.
• 91.14: Fibonacci 50% for the whole drop from 93.75.
• 91.76: Fibonacci 61.8% for the whole drop from 93.75.
Forex Trading Analysis written by Munther Marji for ForexPros.
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