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 isunemployed but actively seeking employment and willing to work in theUS.
A high percentage indicates weakness in the labor market. A lowpercentage is a positive indicator for the labor market in the US andshould be taken as positive for the USD. Analysts predict a reading of9.80%.

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Euro Dollar

The Euro stopped only 8 pips below the support specified in yesterday’sreport, and rocketed once again, breaking the resistance 1.3653, andstopping only 5 pips below our suggested target 1.3740. Today, we seeits best to count on short term levels to lead the way for the singlecurrency on the short term. Short term support is at Fibonacci 61.8%for the micro term (which the price stopped accurately at almost anhour ago). If we break this level, the Euro will start a drop that weexpect to be strong, and will target the most important support (forthe short term) 1.3549, and if this level is also broken, the drop willgo on, and we will probably see another weekly low below Tuesday’s1.3434. As for the resistance, it is provided by the falling trend linefrom yesterday’s high, and is currently at 1.3691. If broken, the Eurowill continue this sharp rise, and will target 1.3799 & 1.3885.

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

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

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USD/JPY

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

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

Resistance:
• 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.

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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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