24 May 2001, 17:20  US FX Daily Outlook: Profit taking vaults euro off 6-month low (part 2)

* EUR/USD rose with EUR/JPY from Asia's 6-month low of 0.8480 to an intraday high of 0.8613. Italy's consumer confidence index for May provided some long-awaited good fundamental news for the EUR, rising to a 1-year high of 125.4 from 122.9 in April.
Jitters also remained about possible ECB intervention after the BBK was rumored to buy EUR/USD for commercial purposes overnight. BridgeNews has learnt that the ECB is closed today, although with other Eurosystem central banks open this does not necessary preclude intervention. The outlook is mixed to slightly bullish.

Support: 0.8480 (overnight low; 6-month low), 0.8416 (support line declining since Jan. 25), 0.8372 (Nov. 23 low).
Resistance: 0.8609 (overnight high), 0.8790 (38.2% Fibonacci retracement level of the June-October downtrend), 0.8848 (61.8% Fibonacci retracement level of the Nov. 27-Jan. 5 uptrend), 0.8814 (20-day moving average), 0.8921 (200-day moving average), 0.8963 (50% Fibonacci retracement level of the June-Oct. downtrend).

* USD/JPY was less impressive, although it managed to hold above the 2 1/2 month low of 118.80 touched in Asia after Japanese Minister for Economic and Fiscal Policy Heizo Takenaka said the JPY's strengthening on Wednesday was "OK."
The outlook is mixed.

Support: 119.65 (Gann 50-point pivot; targets: 119.15/120.15), 119.00 (38.2% Fibonacci retracement level of the August 1998-December 1999 downtrend), 118.80 (overnight low), 118.25 ( Gann 50-point pivot; targets: 117.75/118.75).
Resistance: 120.43 (overnight high), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 122.26 (20-day moving average), 122.49 (60-day moving average), 122.50 (Gann 50-point pivot; targets: 122.00/123.00).

* EUR/JPY continued to direct traffic. After plunging to a 5-month low of 101.04 in Asia and dragging USD/JPY and EUR/JPY down in its wake, talk of profit-taking from a couple of U.S. banks pushed it higher in Europe. Japanese Finance Minister for International Affairs Kuroda also lent a hand by repeating Japan would take appropriate action if unnatural currency moves continued.
However, the cross still remained below the 103.62 peak touched briefly in Asia following unconfirmed (and now widely doubted) rumors of BOJ intervention.
The outlook is slightly bullish.

Support: 101.04 (overnight low; 5-month low), 100.00 (psychological level), 97.22 (Dec. 12 trough).
Resistance: 103.15 (overnight high), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend),107.75 (20-day moving average), 109.11 (100-day moving average), 109.55 (60-day moving average).

GBP/USD had a rocky morning, despite growing signs of a rift between U.K. Chancellor Brown and U.K. Prime Minister Blair over EMU-entry. A U.S. investment bank was said to sell cable down to a 6-month low of 1.4118, while EUR/GBP climbed to a 2-day high of 0.6074. Another gloomy CBI survey of the U.K.'s industrial sector didn't help, although the headline total orders index was not as bad as rumored shortly before the release, coming in at -24 for May.
The outlook is mixed.

Support: 1.4118 (overnight low; 6-month low), 1.3966 (Nov. 24 trough). Resistance: 1.4197 (overnight high), 1.4291 (20-day moving average), 1.4360 (60-day moving average), 1.4402 (61.8% Fibonacci retracement level of Nov.-Jan. uptrend), 1.4534 (50% Fibonacci retracement level of the Nov.-Jan.
rally), 1.4465 (100-day moving average), 1.4666 (38.2% Fibonacci retracement level of the Nov.-Jan. rally).

© 1999-2024 Forex EuroClub
All rights reserved