Euro Dollar Rally Five Wave Mode Rally
Currencies / Forex Trading Sep 10, 2009 - 03:05 AM GMT
The rise that we expect to be in a 5-wave mode, is still developing nicely, reaching 1.46 for the first time this year. We still believe it has enough strength to reach the top of the channel, which is slowly approaching 1.47. The resistance which stopped yesterday's rise is actually 1.4592 (yesterday's high was 1.4600), and we will adopt it as resistance of the day.
A break here would indicate strength that has the ability to lead the Euro to the top of the channel, which is currently at 1.4665. And if this resistance is broken there will be nothing separating the price from December's unforgettable top: 1.4720. As for short-term support it is 1.4548, if broken, the door will be open to a correction of this strong and sharp rise, which is expected to lead to testing yesterday's low 1.4465 and after that 1.4395: Fibonacci 50% for the whole move up from 1.4190 last week to 1.4600 yesterday.
Support:
• 1.4548: short-term support.
• 1.4465: yesterday's low.
• 1.4395: Fibonacci support 50% for short-term.
Resistance:
• 1.4592: short-term resistance.
• 1.4665: the top of the current channel on the hourly chart.
• 1.4720: the unforgettable top of December 2008.
USD/JPY
Finally, we have tested the most important support level in the current price area: 91.73-91.76, which is the small support area that holds within the lows of July 8th, 10th, and 13th. Price hardly held above it after reaching 91.60. And we think that breaking it would have enough influence to "finally" accelerate the downtrend, and would be followed by a move down to 90.90 or even 89.69. As for attempts to go higher, they would not mean anything without a break of Fibonacci 61.8% resistance at 92.20, which stopped the rise twice, during the American & Asian sessions. If this resistance is broken, we think the USDJPY will target areas above 93 such as 93.42, and if this one is also broken, the next stop would probably be 94.16.
Support:
• 91.73-91.76: Strong, important support area that combines July 8th, 10th & 13th lows.
• 90.90: Oct 24th 2008 important bottom.
• 90.40: Feb 13th low.
Resistance:
• 92.20: short-term Fibonacci 61.8%, the resistance that stopped the rise twice during the American & Asian resistance.
• 92.74: the previous important support that was broken this week.
• 93.42: AUG 21st low, and SEP 1st high.
Analysis by: http://www.Forexpros.com - Written by Munther T. Marji
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