NEW YORK, July 11 - The following is a selection of comments on important technical developments in the foreign exchange market.
LINDY WAI, SENIOR TECHNICAL ANALYST, MCM CURRENCY WATCH
EURO/DOLLAR: "In the euro we have seen a recovery since falling to a new low for the year at 83.50 level last week. Over the short-term, it's heading toward the 86.10 to 86.65-86.75 level. That level is where we have a falling trendline all the way from March, so if it breaks above the 86.75 level, then we should have seen a base over the last week. Which means that over the very long term we might be in the process of making an inverted right shoulder on the weekly chart.
"In the meanwhile, we are still below this level and as long as we stay below it, there is a possibility that we may not break (above it) and we might see a return to 83.50. So that 86.75 level is quite important. DOLLAR/YEN: "We have been seeing a continuation of this dollar/yen bull run to 126.15 on Friday, before the latest correction. However, the mid-term bull trend is still intact. "Any pullback right now should be limited to about 124.60-124.70 and from there I see a retest of 126.15. It should break and it should open up to this year's high of 126.24 seen on April 2. This currency is still trading within this one-month bull channel.

ROMAN DUTKEWYCH, TECHNICAL ANALYST, LEHMAN BROTHERS
EURO/DOLLAR: "We are positioned long. It's a very, very important technical level once again. We hit a new low for the year on Friday at 83.50 cents and now we've rallied to 85.70 cents -- that places us right at the 40-day average at 85.60 and there's a trendline from the March highs at 85.80 cents. So I think that's going to be a tough level to get over in the near term.
"It's going to consolidate for the near term, but I do think it's going break to the upside. Look for a break over 85.80 to confirm some sort of trend change for the euro. "If you get a move into 85.15, that should hold for new buying. 85.15 is first support, second support is 84.40 and under 84.40 you're going to see new lows.
EURO/YEN: "It's kind of the same idea. Euro/yen's doing much better. It's trading above its 40-day moving average at 105, so the trend structure is definitely more positive. There is a big resistance area at 107.50 yen, which is the trendline drawn off the April highs, that's where we stopped today. I think we're going to consolidate for the rest of the afternoon. "I think you want to be buying weakness just under 107 yen, the 106.80-106.70 area should hold. Once you get through 107.50 that should confirm the next upleg. Our targets are 109.50-109.85 yen, that's for the middle to the end of next week.
DOLLAR/YEN: "Everything is positive technically for dollar/yen. The only problem is that speculators have set their largest net long U.S. dollar position for the year, so it's definitely a concern that the long side is very crowded right now. "If we have a little bit of weakness, it's going to hold 125.00-124.90 yen. You have to break 124.10 to start to trigger some of these trend stops and get those long dollar positions out. "From here, I think we should retest the highs for the year, 126.85 yen, over the next week as as euro/yen breaks higher.
DAVID SOLIN, PARTNER, FOREIGN EXCHANGE ANALYTICS
STERLING/DOLLAR: "Cable has again bounced to test the resistance line currently near $1.4125/75. It appears to be another good risk-reward sell area for an initial retest of $1.3955/75 and even the June low at $1.3685/10. "Though we would stop on a clear close above that trendline, we would not want to reverse to buy for the medium or longer term as there appears to be the risk of only a week or so of further gains before reversing sharply lower again -- a risk of a "false or temporary break". The upmove, if it did occur, would likely get people long, or longer -- often a precursor to a more significant downmove."