8 January 2001, 16:20 US FX Daily Outlook: Euro/dollar, dollar/yen pause their uptrend (part 2)
* One day after hitting a fresh 6-month high of 0.9595, the EUR/USD
slipped on profit taking, as its two-pronged attack on the upside turned
empty-handed at 0.9592. The hard resistance at 0.9600 lends more
credibility to the defense of knockout options' triggers at 0.9600, which
are said to expire Tuesday.
EUR/USD's decline was compounded by sales of EUR crosses, which were
weighed by profit taking, and by commercial and speculative sales.
A U.S. moneycenter bank, followed by a U.S. investment bank, were said
to have spearhead sales.
The euro zone economic agenda showed a slightly better-than-expected
0.4% m/m rise in German November industrial production and a rise in the
euro zone's business climate index to 1.24 in December from 1.21 in
November. While it provided only fleeting support, the data emphasized
once again that the euro zone economy is maintaining its status quo at a
time when the U.S. economy is fighting to avoid a hard landing.
The outlook is mixed to slightly bearish, as EUR/USD is stuck within
Friday's range of 0.9465-0.9595.
Support: 0.9486 (overnight low), 0.9465 (previous low), 0.9188
(support line rising since Nov. 27), 0.9039 (200-day moving average),
0.8979 (61.8% Fibonacci retracement level of the July 26-Oct. 26
downtrend).
Resistance: 0.9592 (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).
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