Weekly Forex Signals

U.S. Dollar could drop as euro seems to regain strength

Mon, May 5 2008, 11:02 GMT
by Benny Menashe

Finotec Group Inc.


Long signalShort signal
Buy a break of resistance level at 1.5500Sell a break of support level at 1.5365
EUR/USDBuy a break of resistance level at 1.5645Sell a break of support level at 1.5340
Buy a bounce at 1.5365Sell a failure of breaking the resistance 1.5500


Fundamental

The U.S. dollar was a shade weaker on Monday but held on to most of last week's gains, supported by labour market data and speculation the Federal Reserve will not need to cut interest rates again.
The dollar firmed on Friday after U.S. payrolls fell in April by a smaller-than-expected 20,000, while the jobless rate actually dipped to 5.0 percent.
“The drop in the unemployment rate has strengthened the market's conviction that the Fed is done," said Darren Gibbs, an economist at Deutsche Bank.


Technical

The Euro may start its uptrend again as we can see strong demand in the market, based on technical indicators like RSI, which is giving us a clear bullish signal, MACD breaks the equilibrium level and is pointing upwards, Bollinger gives us a bullish signal by closing the candle above the middle band.

EUR/USD (Daily Chart)

The primary tendency breaks the trend line with a strong retracement.

Daily Chart

EUR/USD (4 Hour Chart)

The pair is in oversold area.

hour chart

EUR/USD (Hourly Chart)

The Minor trend shows us a failure swing bottom formation.

hourly chart

Resistance
1.5500
1.5646

Support
1.5365
1.5340

Published on  Mon, May 5 2008, 11:06 GMT

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