ROBERT ZUKOWSKI, TECHNICAL ANALYST, 4CAST LTD.:
EURO/DOLLAR: "The thing to really concentrate on is the large expanding channel forming since January. That's offering key target support around the 82.40/50 area, and this latest breakdown has a decent shot of targeting that area, which is roughly near that all time low. It could make a stand around there, so I wouldn't be all that gung-ho bearish. There's still room down there, and you have to take neutral stance on an approach to that area. I have resistance around 84.00/25 area, and it looks like the market must close above that to signal that there's any kind of potential for a (rally). If the market does manage to snap (under) 82.50/25 area...the immediate projections are to 81.50 to 81 the figure.
"In actuality, while we are playing for a move into mid-82 region in the short-term, we think it may be time to lighten up on bear call and turn neutral.
DOLLAR/YEN: "Technically we've been a proponent of a bull for a while now, the key reason being because the latest rally took out the 61.8 percent retracement of the prior decline (from the April 2 high of 126.80 yen), and that would signal a full 100 percent retracement of the prior move. that would get us back toward the 126.80/127 area. It should be headed toward there in the next week or so. The market had a breakout from a continuation pattern that had been forming over the past several days, and it projects to that area. We have support coming around 125 and if dollar/yen closes below there, that would be a warning sign. It's a breakout point, and the market must hold its breakout points to signal the bullish scenario is still intact. We're still bullish toward the upper 126 area to retest of that old high. First area of resistance is 126, then second key level 126.80, the prior (April) high and the ultimate target for this run-up. Afterward, the dollar is probably poised to range-trade again near that level. DOLLAR/SWISS FRANC: "Dollar/swiss would be a complete flip-flop of euro/dollar. We've been tracking an expanded channel to the upside since January. We hit a high above 1.82 francs today, and I really don't see any resistance until the (October 26) 2000 high of 1.83, If you take that out that bodes well for 1.85, which is the upper band of the expanding pattern. Right now we think we can get a retest of that old October high, but it's not all that clear that it will accelerate to 1.85, so we'd like to see how it trades around the 1.83 area. I have key support around 1.8058, which is the recent breakout area, but if you close below there that will be a warning sign that this thing look a little toppish."
DAVID SOLIN, PARTNER, FX ANALYTICS RESEARCH:
DOLLAR/YEN: "In June, we said the 106.95 yen area was the medium term "likely max retracement area." The market spiked past there about a week later to 107.70, turning our medium/longer term outlook to neutral. "We now suggest trading with a shorter-term time horizon until confidence in a medium-term view increases. Near term, (you would) want to be short near the 106 area for an initial retest of last week's 104.75/90 low (also 38 percent retracement from the June low at 99.90), with 103.80/95 and potentially below after. Trade on a break of 104.75/90 may be key to the medium term as the inability to accelerate sharply lower would be viewed as a bullish sign.