Finotec News Archive - May 09 2008
Euro looking to rally against distant yen!
The euro held firm against the dollar on Friday after rebounding from a two-month low on reduced expectations for European Central Bank rate cuts.
Anthony Boyajian 
09 May 2008
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The euro held firm against the dollar on Friday after rebounding from a two-month low on reduced expectations for European Central Bank rate cuts.
ECB President Jean-Claude Trichet said on Thursday that inflation remained his top concern, suggesting the bank won't cut interest rates any time soon.
The yen edged higher against the dollar after jumping the previous day as investors reduced exposure to risk and and cut carry trades, while Japan's Nikkei stock average and other Asian stocks fell on Friday.
Market players said deepening concern about slowing global growth, getting a pinch from a U.S. economic downturn, was helping the low-yielding yen, which is typically used to finance risky investments such as carry trades.
The following technical analysis gives us a detailed lookout on what is expected to happen to EUR/JPY.
The buying point is at 159.67; based on a failure swing formation.
- Fibonacci 50% is the take profit at 161.11
- Previous support is the stop loss at 159.17
The selling point is at 158.90; based on a break of a strong support level.
- Previous support is the take profit at 158.40
- Fibonacci 23.6% is the stop loss at 160.09
To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of MACD line to the signal line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI; we can determine that the market is in a bullish direction by breaking 30% line.
The momentum oscillator is very important to understand the strength of the market and as we see on the graph it breaks the zero level upwards. The Stochastic oscillator breaks 20% line and continues to move higher.
* The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text.
By Finotec’s professional analyst,
Tony B.
dealingdesk@finotec.com
EUR/JPY Hourly Chart
Finotec Analysis Team
09 May 2008
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