Forex Daily news – 04.09.2012

The price is still located in the middle of the ascending price channel and the range of the last 8 days between the 1.2465 and the 1.2585 price levels. Yesterday we saw the price descending again and reaching the 38.2% Fibonacci correction of the last downtrend (red line) on the 1.2515 price level and retracing its steps. At this point it is possible to assume that the move upwards will continue towards the 50% Fibonacci correction level of the last downtrend (red line), around the 1.2662 price level as first target. On the other hand, the Moving averages are still Bearish and this uptrend is still a correction to the last downtrend (until it will pass the 61.8%) and we might see continuation of the range of the last several days, followed by a descending move towards the Bollinger’s moving average on the 1.2410 area.

It is possible to see that the price has corrected all the last downtrend (blue broken line), by 38.2% by Fibonacci to the 1.2594 price level, while the red broken line is the upper lip of the descending price channel shown in the weekly chart and used as a dynamic resistance. In addition it is possible to see that the current ascending move which started on the 1.2067 price level is moving in a shrinking ascending tunnel with a target of breaking of the lower lip while performing a technical correction of the ascending move in it. All those are signs for a possibility of a stoppage of the current uptrend in case a descending price structure will build and a reverse of the direction of the price towards the last low on the 1.2067 price level. On the other hand, it is possible to see that at the moment the price is located under an ascending price structure and as long as is will continue this way its targets will be the 1.692, 1.2750, 1.2824 price levels.

The price is ranging now between the 1.2480 and the 1.2590 price levels, while breaking the upper lip of the range and the establishment of the price above it will probably lead the price to the target of the depth thrown upwards, meaning the 1.2690 price level. On the other hand, breaking the lower lip of the range on the 1.2480 will lead the price towards the 1.2367 support level.

The price is still located on the upper section of the Bollinger bands and it looks like there is a struggle between the buyers and sellers on the direction of the price, while the buyers are showing their power by having a slight advantage during the more volatile hour of the day. The 1.5752 is still a key level and it is possible to assume that the price will check it again before we will see the direction of the market. Breaching the 1.5752 support level will probably lead the price towards the 1.5700 price level which is the 50% Fibonacci correction level of the last uptrend. On the other hand, the moving averages are Bullish and the main trend is still with the direction of the north, if the 1.5752 price will hold, it will be possible to assume that the first target of the price is the last peak on the 1.5912 price level.

It is possible to see that the price is moving in an ascending price channel (black broken lines), breaking of the 1.5900 price level is suppose to bring it in first stage to the 1.5942 price level (the “One in, one out” pattern target) followed by a move towards the upper lip of the tunnel. On the other hand, stoppage of the price at the current area (up to the last peak on the 1.5913 price level) and breaking the lower lip of the ascending price channel will probably lead the price towards the 1.5750 price level at first stage,

15.00 (GMT+1) USD – ISM Manufacturing PMI