Forexpros.com Daily Analysis - 10/03/2010

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ForexPros Daily Analysis March 10, 2010


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Fundamental Analysis: Trade Balance

Traders of the US anticipate the publication of the Trade Balance index. The
index measures the difference in worth between exported and imported goods
(exports minus imports). This is the largest component of a country's
balance of payments.
Export data can give reflection on the US growth. Imports provide an
indication of domestic demand.
Because foreigners must buy the domestic currency to pay for the nation's
exports, it may have sizable affect on the USD.
A higher than expected reading should be taken as positive/bullish for the
USD, while a lower than expected reading should be taken as negative/bearish
for the USD. Analysts predict a reading of -41.00B.

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Euro Dollar

The Euro broke the support 1.3595, and stopped only 7 pips below the
suggested target, and created another bottom in the same area of last
Friday's low (1.3529). This boring behavior, and moving back and forth in
almost the same areas in the past days, made us wonder if we could be in a
triangle of some sort. If this is true, the triangle limits are 1.3673 &
1.3557, but we will espouse Fibonacci 61.8% support & resistance at 1.3566 &
1.3639 to be today's levels. We can only hope to end this boredom with a
break of one of these levels. If the resistance at 1.3639 is broken, we
expect the Euro to jump and test the top of the falling channel at 1.3729.
And if this important resistance is broken too, we will see the Euro flying
to 1.3810. On the other hand, if the support at 1.3566 is broken, we expect
a test of the rising trend line from 1.3442 as a first target (this line is
currently running at 1.3472), and if broken we will reach a fresh cycle low
at 1.3390.

Support:
* 1.3566: Fibonacci 61.8% for the short term.
* 1.3472: the rising trend line from 1.3442 on the hourly charts.
* 1.3390: Apr 13th high.

Resistance:
* 1.3639: Fibonacci 61.8% for the short term.
* 1.3729: the top of the falling channel on the hourly charts, and a very
important resistance for the short term & the medium term.
* 1.3810: Feb 10th high.

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USD/JPY

After Fibonacci resistance 90.66 has succeeded in reversing the short term
direction, the price traded under it for the whole past 24 hours, reaching a
low of 89.61, and drifting away more than 100 pips from the weekly high,
which is in total agreement with Fibonacci analysis that suggests we had a
short term direction-changing top at 90.66.This rebound from Fibonacci
retracement level with very good accuracy is evidence that the general
direction of the short-term is down. If this turns out to be true, we will
see the Dollar-Yen breaking the nearby support 89.69, and trying to attack
the Fibonacci support 89.09 which will act as a first target for this break,
and in case this level is broken, we can say that the drop from 90.66 is
more than a correction. If this level is also broken, the target would be
88.46, on the way to lower targets. As for the resistance it is provided by
short term Fibonacci 61.8% resistance, at 90.26. If this line is broken, we
will be on the way to another weekly high, since the targets for such a
break would be 90.84 & the well known important resistance 91.67.

Support:
* 89.69: Fibonacci 50% for the short term.
* 89.09: Fibonacci 61.8% for the short term.
* 88.46: previous hourly support.

Resistance:
* 90.26: Fibonacci 61.8% for the drop from this week's high.
* 90.84: Nov 5th & 6th high.
* 91.67: previous hourly support.

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Trading Analysis written by Munther Marji for ForexPros.

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