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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