20 June 2001, 17:19  US FX Daily Outlook: Euro sinks further, yen also weakens (part 2)

* USD/JPY was pushed to a 3-day low of 122.59 in late Asian trading by selling from Japanese players in USD/JPY itself and also in the GBP/JPY and AUD/JPY crosses. However, the pair bounced to an intraday high of 123.38 on rumors BOJ governor Hayami had resigned. EUR/JPY was pulled off a 3-day low of 104.55 to an intraday high of 105.22 while GBP/JPY bounced from the 171.15 area to the 172.45 region. Both pair and cross subsequently dropped back into their earlier ranges when the rumors were denied. The outlook is slightly bullish.

Support: 122.59 (overnight low), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 122.43 (60-day moving average), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 121.04 (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).
Resistance: 123.38 (overnight high), 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 was stuck in a 0.8525-0.8545 range. The euro zone recorded a preliminary 3.0-bln-EUR trade deficit in April, down from a 3.2-bln-EUR deficit in March. Spanish GDP grew an as-forecast 3.4% y/y in Q1, while Italian Q1 GDP rose 2.4% y/y at the final estimate, revised up from the initially 2.3% y/y rise. The BBK, in its monthly report for June, said economic indicators are suggesting German GDP growth would have been "very restrained" during the spring months. The outlook is weak as euro falls below 20-day support at 0.8537.

Support: 0.8512 (overnight low), 0.8537 (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), 0.8228 (Oct. 26 low; lifetime low).
Resistance: 0.8543 (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), 0.8888 (200-day moving average).

* EUR/JPY is steady after hitting a 5-day low of 104.54. The pair remains stuck in a trading range bordered above by the 60-day and below by the 20-day moving averages. The outlook is mixed.

Support: 104.55 (overnight low), 103.34 (20-day moving average), 103.19 (200-day moving average), 99.85 (June 1 low; 5 1/2-month low), 97.22 (Dec. 12 trough).
Resistance: 105.22 (overnight high), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 107.30 (60-day moving average), 107.87 (100-day moving average).

* GBP/USD softened slightly following the release of U.K. trade data for April/May and the minutes of the June 6 MPC meeting. The U.K. recorded a below-forecast global trade deficit of 2.881 bln GBP in April though a greater-than-forecast PSNCR of 2.441 bln GBP in May. The minutes of the June 6 MPC meeting showed an 8-1 vote to keep the repo rate on hold at 5.25% and that the majority had expressed concern over the inflationary impact of a further cut. However, subsequent data has made the minutes largely redundant.
EUR/GBP firmed from a 10-day low around 0.6090 to the 0.6120 area, while cable slipped to an intraday low around 1.3940. The outlook is weak.

Support: 1.3923 (overnight low), 1.3688 (June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4014 (overnight high), 1.4035 (20-day moving average), 1.4225 (60-day moving average), 1.4331 (100-day moving average).

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