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Daily Forex Technical Report

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Daily Forex Technical Report − EUR/USD Rebounds, Correction Completed?

Tue, Mar 25 2008, 07:05 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Daily Report

EUR/USD Rebounds, Correction Completed?

Markets focus turns back to strength in Euro and weakness in dollar as traders are finally back from vacations. Overall direction is not clear at this moment as different contradicting forces are driving the forex markets. On the one hand, commodity markets remains generally weak, with oil dropping close to $100/bl level and gold hovering near to recent low. On the other hand, carry trade unwinding cools on strong rebound in Asian stock markets. Nevertheless, the more noticeable movements are the broad based weakness in dollar and broad based strength in euro which is also reflected with EUR/USD topping the top movers chart of today so far.

Technically speaking, dollar's rebound is still retreated as a correction only, as least against Euro, yen and Swissy. Meanwhile, Euro's retreat against dollar as well as against Sterling is also treated as correction. These pairs remain the better bet on next round of dollar weakness.

Looking ahead, with an empty economic calendar in European session, focus is on Canadian retail sales, US consumer confidence in the US session. Retail sales in Canada is expected to rise 0.9% mom in Jan, up from 0.6% in Dec. Ex-auto sales is expected to rebound by rising 0.5% mom, up from -0.4% fall. Conference Board Consumer Confidence in US is expected to drop from 75 to 74 in Mar.

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EUR/USD Daily Outlook

Daily Pivots: (S1) 1.5357; (P) 1.5407; (R1) 1.5471; More

EUR/USD's rebound from 1.5342 and touching of 1.5567 resistance suggest that correction from 1.5902 has completed there, contained above mentioned 1.5277 cluster support (38.2% retracement of 1.4309 to 1.5902 at 1.5293). Intraday bias is flipped back to the upside and further rise is in favor to retest 1.5902 high. Though, below 1.5408 minor support will argue that correction from 1.5902 is still in progress and will put focus back to 1.5277 clusters support again.

In the bigger picture, rise from 1.4309 has just missed 100% projection of 1.3360 to 1.4966 from 1.4309 at 1.5915. Though, the structure of the rise from 1.4309 suggest that there should at least be another rally attempt, probably to 1.6000 psychological resistance before completing the rise. However, firm break of 1.5277 cluster support will argue that 1.5902 is likely a medium term top and deeper correction should be seen to 1.4309 and 1.4966 support zone.

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Published on  Tue, Mar 25 2008, 07:10 GMT