Daily Analysis – 04/03/2010

ForexPros Daily Analysis March 4, 2010

Fundamental Analysis: US Unemployment Rate

Traders of the US anticipate the publication of the Unemployment Rate, which is a measure of the percentage of the total labor force that is unemployed but actively seeking employment and willing to work in the US.
A high percentage indicates weakness in the labor market. A low percentage is a positive indicator for the labor market in the US and should be taken as positive for the USD. Analysts predict a reading of 9.80%.

Euro Dollar

The Euro stopped only 8 pips below the support specified in yesterday’s report, and rocketed once again, breaking the resistance 1.3653, and stopping only 5 pips below our suggested target 1.3740. Today, we see its best to count on short term levels to lead the way for the single currency on the short term. Short term support is at Fibonacci 61.8% for the micro term (which the price stopped accurately at almost an hour ago). If we break this level, the Euro will start a drop that we expect to be strong, and will target the most important support (for the short term) 1.3549, and if this level is also broken, the drop will go on, and we will probably see another weekly low below Tuesday’s 1.3434. As for the resistance, it is provided by the falling trend line from yesterday’s high, and is currently at 1.3691. If broken, the Euro will continue this sharp rise, and will target 1.3799 & 1.3885.

• 1.3645: Fibonacci 61.8% for the micro term.
• 1.3549: Fibonacci 61.8% for the short term.
• 1.3434: Tuesday’s low.

• 1.3691: the falling trend line from yesterday’s high on intraday charts.
• 1.3799: Feb 11th high.
• 1.3885: Feb 2nd low.


Dollar-Yen broke the support 88.53 only to stop in the middle of the way to the suggested target, settling for 88.31. This break gives chance to more drop, but on one important condition. This condition is to stay below, and not break, the falling trend line from 92.13, which is currently only pips above the current price, at 88.53. If the price stays below this line, more drop is to be expected. Short term support is at 88.31, and if broken we will move slowly towards 87, where the targets 87.72 & 87.00 awaits. The technical outlook stays negative as long as we are below the resistance of the day 88.53. But in case this level is broken, USDJPY will enter a long awaited correction for the whole drop from 92.13, with the ideal targets at Dow & Fibonacci levels 89.58 & 90.22.

• 88.31: Asian session low.
• 87.72: Dec 10th low.
• 87.00: Nov 27th high.

• 88.53: the falling trend line from 92.13 on the hourly charts, the upper limit for the downtrend.
• 89.58: Dow 33.3% for the drop from 92.31.
• 90.22: Fibonacci 50% for the drop from 92.31.

Forex Trading Analysis written by Munther Marji for ForexPros.

For information on US dollar index see ForexPros.

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