26 January 2001, 17:37 * EUR/USD extended Thursday's gains to hit a 2-day high of 0.9317 as
markets digested Thursday's comments from Fed Chairman Greenspan and a
story in the Wall Street Journal in which U.S. Treasury Secretary Paul
O'Neill conveys a sense of urgency on the U.S. economy.
Speaking at the World Economic Forum in Davos, Switzerland, BBK Pres
Ernst Welteke said a 50-bp rate cut by the Fed next would cause the ECB to
give added consideration to its own monetary policy. Welteke said that
while ECB policy is on hold now, that might change.
Also speaking in Switzerland, French finance minister Laurent Fabius
said Fed easing shouldn't affect the "independent" ECB.
The Handelsblatt reported the German government would leave its growth
forecast at 2.75%. Euro zone December M3 data came in up 5.0% year-on-year
on a three-month basis. German December producer prices fell 0.3% from the
previous month.
The outlook is mixed, after the euro gave up most of its gains against
the dollar.
Support: 0.9222 (overnight low), 0.9136 (61.8% Fibonacci retracement
level of the June-October downtrend), 0.9115 (Jan. 25 low; 5-week low),
0.9028 (200-day moving average), 0.8979 (61.8% Fibonacci retracement level of the
July 26-Oct. 26 downtrend).
Resistance: 0.9317 (overnight high), 0.9595 (Jan. 5 high; 6-month
high), 0.9621 (38.2% Fibonacci retracement level of the Jan 1998-Oct 2000
downtrend), 0.9693 (June 19 peak), 0.9702 (June 8 peak), 0.9795 (March 2
high).
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