ForexPros Daily Analysis May 12, 2010
Fundamental Analysis: Initial Jobless Claims
Traders of the US anticipate the publication of the Initial Jobless Claims. The Initial Jobless Claims is a seasonally adjusted measure of the number of people who file for unemployment benefits for the first time during the given week. This data is collected by the Department of Labor, and published as a weekly report. The number of jobless claims is used as a measure of the health of the job market, as a series of increases indicates that there are fewer people being hired. On a week-to-week basis, claims are quite volatile. Usually, a move of at least 35K in claims, is required to signal a meaningful change in job growth. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD. Analysts predict a future reading of 440.00K.
The Euro broke the support specified in yesterday’s report 1.2706 and successfully reached the first suggested target, stopping only 4 pips below it! Today, yesterday’s target have turned into the most important support, because it managed to stop the latest episode of the falling series which started close to 1.3105 Fibonacci level that we have talked about previously. If the price holds above this support, it will finally have a break, and we could see a rising correction after this drop of more than 500 pips in less than 48 hours! Today’s resistance is at 1.2693, and breaking it would indicate we are already in a rising correction for the whole drop from 1.3092. The ideal targets for such a correction are 1.2790 & 1.2848, which we will focus on for today. Later, the price may reach the third and ideal target for this correction at 1.2906. Support is as we said, at the target which was met yesterday 1.260, and breaking it would drag the price to 1.2511 then to a fresh cycle low at 1.2455.
• 1.2608: important intraday low.
• 1.2511: last week’s & one-year low.
• 1.2455: Mar 4th 2009 low, an important bottom.
• 1.2693: important intraday top.
• 1.2790: Fibonacci 38.2% for the drop from 1.3092.
• 1.2848: Fibonacci 50% for the drop from 1.3092.
The Dollar/Yen’s is back to slow, small, and boring moves! It barely completed 90 pips from the low to the high in the past 24 hours, which is very frustrating. Today’s important levels are close to each other. The resistance is at 92.87 & the support is at 92.30. We will be waiting for one of these two levels to give way. If 92.30 gives way, a correction for this rocking jump will start, with its first target at 91.40 and the second important target is at 90.75. The resistance is at 92.87, and if broken the price will jump to the resistance that we find very attractive 93.96. If this one is also broken, 95 will become near, as we will target 95.05. In the next few days, important evidence on medium term direction will emerge, and we will be on the watch for them.
• 92.30: intraday support.
• 91.40: Fibonacci 38.2% support for the rise from Thursday’s low.
• 90.75: Fibonacci 50% support for the rise from Thursday’s low.
• 92.87: the falling trend line from Monday’s tops.
• 93.96: previous hourly resistance.
• 95.05: Aug 24th high.
Forex Trading Analysis written by Munther Marji for ForexPros.
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