ForexPros Daily Analysis February 9, 2010


Fundamental Analysis: Fed Chairman Bernanke Testifies

US traders look forward to Ben Bernanke, US Federal Reserve Chairman,who will be testifying in Washington DC, regarding America's economicoutlook and financial markets.
His comments may determine a short-term positive or negative trend.

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Euro Dollar

The Euro kept trading above the support 1.3620, and started to rise,breaking the resistance 1.3666, and reaching 1.3728 until this momentwithout reaching the target 1.3752. As we said yesterday, with Friday’smove taking us close to the channel bottom, and then a fast bouncereaching 1.3666, the odds of an upside correction remains present, butwe need a break of 1.3745 before we can say the odds favor that.Short-term resistance is at 1.3745, and breaking it would indicate thatthe price is already moving higher after the drop we witnessed lastweek, even if that was only for a short term correction. The targetsfor such a correction would be 1.3805 & 1.3857. While the supportis at 1.3666, and breaking it would bring back Friday’s target underthe spotlight: 1.3582 & 1.3516.

Support:
• 1.3666: the rising trend line from 1.3584 on intraday charts.
• 1.3582: Apr 6th high.
• 1.3516: Apr 2nd high.

Resistance:
• 1.3745: important intraday resistance.
• 1.3805: Fibonacci 50% for the last drop from 1.4025.
• 1.3857: Fibonacci 61.8% for the last drop from 1.4025.

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USD/JPY

Dollar-yen did not break any of the important levels specified inyesterday’s report, and kept trading in a relatively tight rangewithout any major moves that have any influence on the technicaloutlook, leaving the technical outlook hardly changed. What is worthmentioning is that we are getting closer to long term Fibonacci 61.8%support at 88.23 (Thursday’s low 88.53), and there is no doubt thatthis level is the most important support in these areas. As for theshort term, the support is at 89.23, and breaking it would indicate amovement to test the most important support 88.23, and if broken thefirst target would be 87.35. Short term resistance is at 89.87, andbreaking it would indicate that the Yen has settled for closing on88.23 without reaching it, and that we are correcting yesterday’s drop,or may be the whole drop from 93.75, which might be over close to theFibonacci support. Such a correction would have ideal targets at 91.14& 91.76.

Support:
• 89.23: the rising trend line from Thursday’s low on intraday charts.
• 88.23: Fibonacci 61.8% for the whole move from 84.81 to 93.75.
• 87.35: Dec 9th low.

Resistance:
• 89.87: Fibonacci 50% for the short term.
• 91.14: Fibonacci 50% for the whole drop from 93.75.
• 91.76: Fibonacci 61.8% for the whole drop from 93.75.

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Forex Trading Analysis written by Munther Marji for ForexPros.

For information on currency trading see ForexPros.

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