Forexpros Daily Analysis Oct 6, 2009
Euro Dollar
The Euro accurately reached the retest level that we specified as 1.4588 (yesterday's low 1.4592), and retested the broken channel successfully. Then it started rising and reached the important resistance 1.4720 this morning, which was specified as the most important target in yesterday's report (the high until the moment of preparing this report is 1.4716). The Euro could keep these benefits, and advance even more if price stays above the short-term support 1.4668, which is the rising trendline from Friday's high, on the intraday charts. If we stay above it, there will be another attempt to break 1.4720 and head higher. And although we notice a resistance at 1.4776, we believe that if the Euro breaks 1.4720, then it will be able to reach areas above 1.48 within 24 hours after the break, first of which is 1.4824, then new highs above the tops of September 22nd & 23rd.
Support:
• 1.4668: the rising trendline from Friday's low.
• 1.4592: yesterday's low.
• 1.4509: Fibonacci 50% for the rise from 1.4176 to last week's top 1.4842.
Resistance:
• 1.4720: the resistance area that stopped the Euro from rising 3 times lately.
• 1.4776: previous well known resistance.
• 1.4824: previous daily high.
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USD/JPY
It seems like the Dollar-Yen is moving with in a pattern that looks like a triangle, since in the past 10 days we have seen the formation of 3 descending tops at 90.39, 90.15 & 89.96, and the formation of 3 ascending bottoms 88.22, 88.59 & 88.96. That is why the borders of this pattern (support 88.74 & resistance 89.77) are the most important for the short-term, and breaking either of them is what will give the next move its direction. If we break 98.77, short-term direction will be up, which would give a chance to approach 91 since the first important resistance in this area is the limit of the downtrend 90.66, which represents the falling trendline from August 9th top. Just below it there is the moving average SMA10. There are several resistance levels between here and the strong 91.63. On the other hand, if we break 89.20 that would mean we are on our way to break the 8-month low at 88.22, in this case 87.97 and 87.10 look like the most possible targets of the next leg down.
Support:
• 88.74: the lower trendline in the supposed triangle pattern, the most important support for the short-term.
• 87.97: Jan 23rd low.
• 87.10: 2009 low.
Resistance:
• 89.77: the upper trendline in the supposed triangle pattern, most important resistance for the short-term.
• 90.66: the falling trendline from Aug 9th top.
• 91.63: strong previous resistance.
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Forex trading analysis by Forexpros – Written by Munther T. Marji
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