NEW YORK, June 15 - The following is a selection of comments on important technical developments in the foreign exchange market.
HANS KASHYAP, PRESIDENT, ANALYTICS RESEARCH CORP.
EURO/DOLLAR:
"The euro had resistance around the 87.00 cents level, that was the breakdown level we saw several weeks back. This is a natural resistance point. Of course today, the euro didn't quite make it, and it's sort of drifted back down. "The 87.00-87.50 cents area should be tested. Euro has shown in no uncertain term that it is not ready to give in at 84.10-84.40, that is initial support. Higher support for today is 85.38 cents, and the swing low is at 84.90. "At this point, I would expect the euro to hold above support. Immediately over next couple of sessions, there'll still be upside strength. It's still in a downtrend.
DOLLAR/YEN:
"The big news is really on dollar/yen. That bottomed very nicely off of 118.30 yen that was the low (June 1). It looks like a fairly stable bottom has been set. 120.90-120.60 yen is support and the currency pair is gradually making higher lows, which is a a sign of strength. So, I'm looking for dollar/yen to head back up and challenge the overhead resistance at 123.70-124.00, that's the next immediate upside move. Ultimately, I'm looking for the dollar to head back and retest its recent highs above 126 yen in the next month or so.
DOLLAR/STERLING:
"It's been caving in. "Its move off of the lows that it made 3 sessions ago ($1.3677 on June 12) has really been a sharp reflex rally off $1.3680 lows up to today's $1.41, but the downtrend is still well established. At this point it's nothing but a rally to sell into. $1.4150 is resistance, and above that, the previous swing high $1.4270. "At this point, it really hasn't done anything out of character for the downtrend. I'd expect to see the market head back down again at some point.
U.S. DOLLAR/CANADIAN DOLLAR:
"It's been sort of volatile today. But it's also been in a downtrend. "A break under the recent swing lows at C$1.5150 will project lower to around C$1.5040 level. It's still under pressure and at this point, any rallies are really suspect. Immediate resistance is around C$1.5380, so any rallies up into there should be short."
PETER REHMER, TECHNICAL ANALYST, ELLIOTT WAVE INTERNATIONAL
EURO/DOLLAR:
"The main point is that now that everybody has given up on the euro and we've got an initial 5-wave rally. We've been looking for a low and seeing signs of extreme sentiment and at the low last week the daily sentiment index hit an all-time extreme for the Chicago euro futures contract. The wave pattern was complete on Monday, we recognized it on Tuesday and it's very likely that euro is embarking on a multi-month advance to 92.60 cents.
DOLLAR/YEN:
That's the one that surprised me this week. It looks very much like dollar/yen has put in the low that I was looking for, but after another push down. It put in a very important wave 2 low in the early part of the month (118.26 on June 1) and is likely rallying back initially toward the April high of 126.83 yen. A better short-term projection is 140 yen and the long-term target worth keeping in mind is 160 yen. We're looking for an extreme advance at this point, it's what we call the third wave, which is usually the strongest, the longest, and most relentless.
EURO/YEN:
It's the euro/yen that's really leading the dollar/yen and it has a much cleaner pattern. Euro/yen put in a really distinct 5-wave rally from October into April, it retraced just over 50 percent of that at the low (99.85 yen on June 1), which are very healthy proportions. Equality with last winter's advance projects 127.60 yen, that's actually a very conservative projection for a c-wave."