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Economic factors to know this week

BERNANKE REASSURES WALL STREET. At the annual Federal Reserve summer retreat at Jackson Hole, WY on Friday, Fed chairman Ben Bernanke said that the central bank "is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly." Translation: we are ready to do what it takes to support the economy. Bernanke stated that the Fed still had plenty of tools to fight deflation, with buying more Treasuries a prime option. He did not mention buying private assets.

$GBPUSD wedge -

We have consolidated inside a wedge which is bearish for the cross.  The cross has tested the top 3 times but has

not broken out so would expect a run back to the bottom of the wedge.  Should it break out south look for 1.5463

and 1.5421 as the downside targets.  A breakout north should produce a move to the 1.5659.  It is Monday and

markets are looking for direction.

Image(s): 

What ProAct Traders sees in the Forex starting the week of August 29, 2010

REMEMBER: THIS IS BIG PICTURE ONLY - NOT INTRADAY! Please NOTE!!!! This is an opinion only!  CLICK ON IMAGES TO ENLARGE

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$EURUSD

WHAT ProAct Traders SEE:  We see a bear flag that is forming on the cross which continues to be bearish.  We have bounced on the .500 fibo from the day chart with the 1.2621 as the next target down.  Further targets are at 1.2604, 1,2532 and 1.2432.  The upside risk is to the 1.2900 area

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Image(s): 

$EURUSD wedge -

We have consolidated inside a rising wedge which is bearish for the cross.  The wedge has taken out the  .500 fib

retracement at 1.2756 but could take out the .618 at 1.2795 before making it's way down.  Targets at 1.2666 (S2)

and the 1.2602 (S3).

Image(s): 

$EURUSD wedge

We have broken out of triangle but not per the norm and are now building a rising wedge which is bearsish for the cross.  The wedge could build up to the .382 fib retracement at 1.2756 before making it's way down.  Targets at 1.2602 (S3 and .270 fib extension) and the 1.2544 (S5).

Image(s): 

$AUDUSD

We have broken out of the bear flag and Strong support can be found at the 0.8753 area where we have the confluence

of the Fibos from the 240 chart and the fib extension from the 30 min and the S4. A break of 0.8753 could go to the

0.8700 area

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Economic Outlook

Quote of the week. "Chance favors only the prepared mind." — Louis Pasteur

A JUMP IN HOUSING STARTS. In a relatively light week of economic data, one of the notable items was a 1.7% rise in new home construction in July. Economists had expected only a 0.2% increase in that category. However, the Commerce Department said most of the gain came in multi-family housing. In contrast, single-family housing starts were down 4.2% for the month, with building permits down 3.1%.1

$AUDUSD -


We are treating all rallies as opportunities to add to our short position. Strong support can be found at the 0.8784 area where we have the confluence of the Fibos from the 240 chart and the fib extension from the 30 min. A break of 0.8784 could go to the S4 at 0.8759 but would also have to break the trend line first.

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EURUSD-AUDUSD Asian

Hello Trader,

 

This is just a “heads up” opinion of what I’m observing since the NY session started today.

 

The EurUsd (EU) topped out @ 1.2730 and then fell to 1.2624. We had a target in the room around 1.2605. If you’re watching during the Asian, and IF the low is in place, then plot fibs from the abovementioned swing hi/lo. IF price re-approaching the 382 of that move, I’ll be looking for a “bounce” lower.

 

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