8 January 2001, 16:21  US FX Daily Outlook: Euro/dollar, dollar/yen pause their uptrend (part 3)

* USD/JPY posted minor losses within Friday's perimeter, while only Stretching Monday's range to 49 points overnight.
U.S. investor's sales pressured the pair to an intraday low of 116.15, but the pair repeatedly bounced from this level after sell-stops at 116.25 were counterbalanced by rumored Japanese bids linked to NTT DoCoMo's purchase of a 10 billion USD stake in U.S.'s AT&T Wireless.
The outlook is mixed within Friday's range of 115.50-116.91.
Support: 116.15 (overnight low), 115.50 (previous low), 114.20 (Gann 50-point pivot; targets: 113.70/114.70), 113.56 (20-day moving average), 112.90 (Gann 50-point pivot; targets: 112.40/113.40).
Resistance: 116.64 (overnight high), 116.85 (Gann 50-point pivot; targets: 116.35/117.35), 116.91 (Jan. 5 high; 17 1/2-month high), 117.35 (upside target of 116.85 Gann 50-point pivot), 117.40 (July 27, 1999, high).
* GBP/USD fell from a 5-month high of 1.5100 on profit taking and speculative sales. A speculative Swiss fund was held responsible for the sales.
EUR/GBP started the GBP/USD's rise with sales from a French account, believed to be executing an order for France's Lafarge. The cross-currency dropped over 1/2 penny to a 4-day low of 0.6318.
The CBI has joined the British Chambers of Commerce in calling for the BOE to cut U.K. interest rates at its meeting later this week. Both business groups say a 25-bps cut is important to underpin confidence at a time when a wobbling U.S. economy is beginning to worry companies. Despite mounting pressure, the MPC is still expected to leave rates unchanged at 6.0% this month.
Financial services companies reported an unexpectedly big jump in business volumes in the fourth quarter of 2000, according to the latest CBI/Pricewaterhouse Coopers survey. The survey findings appear at odds with forecasts of an abrupt slowdown in economic activity and the CBI's call over the weekend for an interest rate cut this week. Dec. U.K. seasonally adjusted narrow M0 money supply rose an unrevised 1.5% on the month and 4.8% on the year.
The outlook is mixed, with GBP/USD seen trimming intraday losses.
Support: 1.4998 (overnight low), 1.4825 (20-day moving average), 1.4491 (100-day moving average).
Resistance: 1.5100 (overnight high), 1.5092 (Jan. 3 high; 4 1/2-month high), 1.5138 (Aug. 15 peak), 1.5175 (resistance line rising since Dec. 4), 1.5630 (target of double bottom).

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