Midday Technical Analysis for Monday August 7 2006
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Midday Technical Analysis: Dollar has a Little Corrected
The dollar has a little corrected upwards at the tenders on Monday as some players have already started to reduce positions before tomorrow's meeting of Federal Reserve System on which, predictably, the central bank will declare a pause in a two-year-old cycle of increase of rates. These expectations have amplified after the publication on Friday of data NFP for July has shown that the number of new workplaces appeared below forecasts.
Meanwhile, the American currency can find some support before session FRS as the market will do forecasts of that central bank can tell about the further policy in the application published on Tuesday. Even if FRS will leave the rate at a former level, dollar, probably, will not test sharply decrease if FOMC will not give precise hints on the termination of a two-year-old cycle of increase of interest rates. If FRS will hint, that interest rates can be raised depending on a situation, sell dollars can to be difficult.
It is quite probable, that before the meeting FOMC the major currency pairs will bargain in narrow price corridors.
EUR
Weekly chart EUR trend – Bullish
Resistances
1.2908 (Friday’s high 08.04.2006), 1.2971/78 (highs 05.15.2006 and 06.05.2006), 1.3043 (76.4% retracement of 1.3483 to 1.1640)
Supports
1.2834 (high 08.02.2006), 1.2778 (61.8% retracement of 1.3483 to 1.1640 at 1.2778 and 61.8% retracement of 1.2978 to 1.2459 at 1.2778), 1.2705 (23.6% retracement from 1.1825 to 1.2978)
GBP
Weekly chart GBP trend - Bullish
Resistances
1.9127 (Friday’s high 08.04.2006), 1.9145 (high 02.18.2004), 1.9177 (towards 61.8% projection of 1.7229 to 1.9023 from 1.8089)
Supports
1.8913 (Thursday’s high 08.03.2006), 1.8795 (short time ascending trend line from low at 07.25.2006 at 1.8383 to low 08.03.2006 at 1.8700), 1.8680 (23.6% retracement from 1.7229 to 1.9127)
CHF
Weekly chart CHF trend – Bearish
Resistances
1.2285 (50.0% retracement from 1.3284 to 1.1920), 1.2365 (Tuesday high 08.01.2006), 1.2395 (the top part of “orchid” channel)
Supports
1.2190/80 (Friday’s low at 1.2190, low 06.05.2006 at 1.2185 and 61.8% retracement of 1.1920 to 1.2593 at 1.2180), 1.2049 (38.2% retracement from 1.3284 to 1.1287), 1.2015 (low 06.05.2006)
JPY
Weekly chart JPY trend – Capped?
Resistances
115.53 (high 08.04.2006), 115.77/81 (23.6% retracement from 108.96 to 117.86 at 115.77 and low 07.21.2006 at 115.81), 116.63 (resistance line from high 12.04.2005 to 04.11.2006 at 116.63 and 61.8% retracement from 121.38 to 108.96)
Supports
113.97 (Friday’s low 08.04.2006), support 113.44/43 (low 07.10.2006 and 50% retracement of 108.96 to 117.86 at 113.43), 111.32 (low 06.02.2006)