15 June 2001, 18:09 US FX Daily Outlook: Dollar extends losses after NAM complaints (part 2)
* USD/JPY pierced the support of the 121.05 Gann 50-point pivot on its way to
a one-week low of 120.85. Several senior Japanese officials said they agreed on
the need to compile another emergency economic package before June 29.
The market showed no reaction to news that the Bank of Japan decided to
keep its policy unchanged, despite intense political pressure to carry out a
further round of monetary easing.
Of note, Finance Minister Masajuro Shiokawa said that Japanese economic
ministers agreed they share some doubts about promoting the disposal of the
bank's bad loans, fearing the potential for economic conditions to worsen as a
result. The outlook is slightly bearish .
Support: 120.85 (overnight low), 121.05 (Gann 50-point pivot; targets:
120.55/121.55), 120.74 (20-day moving average), 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), 118.30 (June 1 trough; 3-month low),
118.25 (Gann 50-point pivot; targets: 117.75/118.75), 116.85 (Gann 50-point
pivot; targets: 116.35/117.35).
Resistance: 121.70 (overnight high), 122.36 (60-day moving average),
122.50 (Gann 50-point pivot; targets: 122.00/123.00), 124.00 (Gann 50-point
pivot; targets: 123.50/124.50), 124.05 (May 16 peak), 124.35 (April 27 peak),
125.50 (Gann 50-point pivot; targets: 125.00/126.00), 126.84 (April 2 high;
29-month high).
* EUR/USD climbed on short covering to a 24-day high of 0.8673 despite pretty
soft euro-zone economic data. French IP disappointed with an above-forecast
0.3% fall on the month in April, while Italian HICP rose a slightly
below-forecast 2.9% m/m in May. Dutch retail sales rose an as-forecast 2.9% on
the year in April. In an FT interview, German finance minister Eichel hinted that the ECB
should cut rates further. The outlook is slightly bullish.
Support: 0.8610 (overnight low), 0.8556 (20-day moving average), 0.8411
(June 11 low; 6-month low), 0.8372 (Nov. 23 low), 0.8245 (1.382% Fibonacci
extension level the Jan. 6-May 4, 19 downtrend; target of fifth Elliott wave).
Resistance: 0.8673 (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), 0.8889 (200-day moving average).
* EUR/JPY was lifted to a 23-day high of 104.93 by demand in EUR/USD, though
ran into strong selling interest around the high. The cross currency will
consolidate between the support of the 20-day moving average at 103.31 and the
resistance at 105.80 from the 38.2% Fibonacci retracement level of the May
1999-October 2000 downtrend. The outlook is mixed.
Support: 104.50 (overnight low), 103.31 (20-day moving average), 102.98
(200-day moving average), 99.85 (June 1 low; 5 1/2-month low), 97.22 (Dec. 12
trough).
Resistance: 104.93 (overnight high), 105.80 (38.2% Fibonacci retracement
level of May 1999-October 2000 downtrend), 107.48 (60-day moving average),
107.93 (100-day moving average).
* GBP/USD climbed to a nine-day high of 1.4101 on ongoing short covering.
Meanwhile, EUR/GBP was pulled to a 2-day high of 0.6170.
Several U.K. newspapers carried articles suggesting the UK government is
back-pedaling on the prospects of an early referendum on UK EMU entry. Europe
Minister Peter Hain told Sky News that the UK should step very cautiously on
the issue. The GBP/USD outlook is slightly bullish.
Support: 1.4081 (20-day moving average), 1.3994 (overnight low), 1.3688
(June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4101 (overnight high), 1.4243 (60-day moving average), 1.4350
(100-day moving average).
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