ForexPros Daily Analysis March 2, 2010


Fundamental Analysis: ADP Nonfarm Employment Change

Traders of the US anticipate the publication of the ADP NationalEmployment Report tomorrow March 2. The report measures the monthlychange of nonfarm private employment, based on a subset of aggregatedand anonymous payroll data that represents approximately 400,000 U.S.business clients. This release, 2 days before the government-releasedemployment data, is a good predictive to the government's non-farmpayrolls data. The change in this indicator can be very volatile. Ahigher than expected reading should be taken as positive/bullish forthe USD, while a lower than expected reading should be taken asnegative/bearish for the USD. Analysts predict a reading of -10.00K.

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Euro Dollar

The Euro stopped only 4 pips above the resistance specified inyesterday’s report 1.3648, and fell hard, breaking the support 1.3589,and successfully reaching the first suggested target 1.3496. It alsocame sort of close to the second target 1.3442 (yesterdays low was1.3459). We note on the attached chart that yesterday’s low came veryclose to the trend line slowly rising from 1.3422, to the extent thatit could be considered as a 3rd touch of the line. Thus, this line hasgained more importance. Usually, when the price stops and creates aseries of bottoms that are so close to each other (1.3442, 1.3450 &yesterday 1.3459), and provides us a slightly rising trend line as itis the case, a break of this line will result in a big move on themedium term, and this is to be expected here. A break of this linecould result in a move approaching 1.30 in a very few weeks. For theshort term, the above mentioned line provides support at 1.3465, and ifit gets broken, we see the Euro falling to 1.3390 & 1.3299. Theresistance is provided by Fibonacci 61.8% for the short term at 1.3578,and if broken the Euro will catch a breath, and jump to 1.3652, and maybe 1.3740.

Support:
• 1.3465: the slightly rising trend line from 1.3422.
• 1.3390: Apr 13th high.
• 1.3299: Apr 24th high.

Resistance:
• 1.3578: Fibonacci 61.8% for the short term.
• 1.3652: important resistance level on hourly charts.
• 1.3740: previous well known resistance area.

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USD/JPY

Not a lot of motion in the past 24 hours, it seems that this pair isstill building a base, in a step to change short term direction. Today,we see the Dollar-Yen trying to break the falling trend line from 89.48on the intraday charts. If it succeeds in doing so, we will be in frontof a new trend in a new week. This trend line is very close to theresistance 89.39, and that is why this resistance will be resistance ofthe day. Breaking it would indicate this pair is targeting the shortterm Fibonacci retracement levels, and the major 3 levels are at 90.02,90.43 & 90.83. We picked the first and last of them as targets forthe 89.39 break. As for the resistance 88.81 has shown strength so far(please refer to the attached chart). We will adopt it as support ofthe day, and if it is broken, we ill not get out new trend today, thefall will continue, and the next set of targets will be 88.00 &87.35, most of them are notably important support levels.

Support:
• 88.81: Oct 7th low.
• 88.00: Fibonacci 61.8% for the short term.
• 87.35: Dec 9th low.

Resistance:
• 89.39: the slightly falling trend line from 89.48 on the intraday charts.
• 90.02: Fibonacci 38.2% for the drop from 92.31.
• 90.83: Fibonacci 38.2% for the drop from 92.31.

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Forex Trading Analysis written by Munther Marji for ForexPros.

For information on US dollar index see ForexPros.

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