NEW YORK, July 12 - 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 seems to be trying to make a turn off this 83.50 cents low. After such a long time of holding against the 84.10 and 84.50 area and so on, the break under those levels really should have precipitated a drop to previous lows around 82.50 and lower. But it's really suspicious that so much buying came in that it stopped basically at 83.50 and from there has run up 300 pips. So, while larger trend is still down, I think the euro is trying to consolidate and go sideways, and will attempt to push through 87 -- and a move above there projects back up around 89-90 area. So I think we're building a base for a countertrend rally.
DOLLAR/YEN: "The previous high was 126.81 yen on April 4 and we basically had gone up to retest those highs at 126.15 or so, and this is a normal reaction down off of it. On a longer term perspective the trend for now still seems to be up and the swing low made at 118.30 is the material swing point against which still to play the long side. But short term, over the next week or so, this market is going to be under pressure. For now I would expect it to drift lower. It might make a stand here against 123.90 with rallies back up into 129.50 but for now I don't really see too much beyond that. A break down below 123.60 opens the way to the way to 122.30. That's the immediate flow. A move above 124.50 from this point will project a short pop intraday back up to 125-125.10. It seems to be building up like that but I'd expect to see that strength stall."

JOSEPH KLETTNER, CURRENCY ANALYST, COMMERZBANK
EURO/DOLLAR: "The recovery from the July 6 low of $0.8350 continued on Wednesday as the euro reached a high of .8642. So far the rally from .8350 has taken out initial resistance at .8465 during Friday's advance and now we have seen the market push through .8600, the resistance of the declining 45 degree trendline which is increasing our confidence that .8350 was an important bottom for the euro. "Now, we expect the market to challenge the late June double tops at .8673 which also represents the last key pivot on the short-term 3-day and the medium-term weekly swing charts. Rallies through here will lead us to believe a more important bottom has formed. "While the bounce from Friday's low continues to unfold, we expect setbacks to be quick and shallow. Initial support is seen at .8544/08 and then additional support is seen at .8461, the 61.8 percent retracement from .8350. One of these support levels should maintain any setbacks from Wednesday's high. "Only a decline below .8461 would cause us to believe that Friday's rally has peaked and that prices are headed lower again. Falling below .8461 would once again turn the focus toward .8228, last year's low. In the meantime, our sights are set on .8673 as the next key obstacle.
DOLLAR/YEN: "While this advance from (the June 1 low) of 118.30 has been unfolding, it appears that the market has traced out a 5 wave advance that may now require an a-b-c wave 2 pullback before the advance from 118.30 resumes. So far, the decline below 124.91/55 on Wednesday has given us some evidence for us to believe that 126.15 competed 5 waves up from 118.30. If prices continue to weaken through 123.66, the key short-term pivot, then we will be convinced that a correction is underway from 126.15 and that the correction will likely see weakness toward 123.15/121.29. This target represents at 38.2 percent to 61.8 percent retracement of the advance from 118.30. Once this target is reached, we can expect the market to resume higher as the bigger uptrend takes over."