NEW YORK, July 3 - The following is a selection of comments on important technical developments in the foreign exchange market.
ALEX BROMBERG, TECHNICAL ANALYST, INTERNATIONAL FINANCIAL SERVICES:
DOLLAR/YEN: "Dollar/yen is staying within a very clear rising channel, with the channel resistance line drawn through June 11, 15, 18-20 and 22 highs. Channel support line is drawn through June 1, 5, 15 and July 2 lows; both lines are rising at a pace of 25 pips a day." "We have a clear initial resistance at 125 yen, with the June 28 and July 2 highs (of 124.97 and 124.98, respectively) right on this round figure." "Looking at the overbought daily stochastic, we could expect some downward correction. Today the chart even made an attempt to break through the channel support. However, the attempt has failed, the chart is back above the channel line, which is now at 124 yen. Now it looks like the chart is targeting 125 again. Above 125 we expect minor resistance at the April 6-9 highs of 125.50, but only the April 2 high of 126.82 looks like a significant target on the upside. We would have to see a decisive break of the major channel support to expect a retracement of the rise from June 1 low to June 28 to July 2 high. Fibonacci levels of support would be at 122.40, 121.60, and 120.80. These levels are potentially very strong supports."
EURO/DOLLAR: "After the completion of the double-top on June 28, the chart is consolidating in a pretty tight range between $0.8500/05 cents and $0.8428. Above $0.85 we will very likely revisit that double-top level, located near 0.8660/70." "I have a strong declining resistance line, drawn through April 23, April 26 and May 4 highs. This line is now at $0.87, and above it we may expect the next resistance at the very strong technical level of $0.8730/40, which looks like the major resistance for euro/dollar. Below $0.8428 and also June 11-12 lows of $0.8408/12, the (euro) may get some support at the former support, which became resistance, drawn through lows of April 30, May 11-14 and then through the highs of June 6 and 11. This line now comes in at $0.8370, the November 2000 low."
DOLLAR/SWISS: "The picture in dollar/swiss is pretty much mirroring the euro one. After completing the double-bottom on June 28, the chart stays in a tight, hundred-point range of 1.8022-1.7910/20 Swiss francs. Below 1.7910 I would expect an initial support at the declining line, connecting June 11 and 20 highs. This line is now at 1.7770. Thereafter, strong support comes in at the June 15-26 double-bottom of 1.7580/85. This was also the first Fibonacci level of April 20 and June 11 upwave, as well as the April 18 high, and appears to be very important support level for dollar/Swiss. I would also watch the major resistance line, drawn through the highs of March 30 through April 2, April 18, May 24, May 31, June 1 and June 11, which is now at 1.8280, but rising at the pace of approximately 15 pips a day.