10 August 2001, 21:53 US FX Daily Outlook: Euro extends gains versus dollar, yen
Cornelius Luca //
New York, Aug. 10 (BridgeNews) - The euro marked a fresh three-month high
of 89.52 cents in Europe, but profit taking ahead of the weekend might temper
its gains in the U.S. session. The dollar trimmed some of its significant
Thursday losses versus the yen after Japanese officials expressed concern over
the undue strength of their currency. But ongoing disinvestment and profit
repatriation will likely reinforce the demand for yen.
Dollar/yen and dollar/Swiss franc rose within Thursday's range,
dollar/Canada rose to a 17-day high of 1.5435 on continuing worries over local
equities, and sterling/dollar slipped within an inside range.
The only domestic event scheduled for release Friday is the July producer
price index, which should show another marginal decrease. Since the Fed is
focusing on growth, lack of evidence of inflation would further enable the
central bank to cut interest rates in order to stimulate the economy.
Key levels are 122.50, a Gann 50-point pivot that houses a host of option
expiries in dollar/yen, and 0.8963, a Fibonacci retracement level, in
euro/dollar.
Current Previous Change Global Global
NY open NY close low high
USD/JPY 122.28 121.80 0.48 121.74 122.40
EUR/USD 0.8936 0.8922 0.0014 0.8911 0.8952
EUR/JPY 109.27 108.68 0.59 108.65 109.45
GBP/USD 1.4244 1.4253 -0.0009 1.4244 1.4276
USD/CHF 1.6921 1.6892 0.0029 1.6850 1.6938
USD/CAD 1.5429 1.5385 0.0044 1.5385 1.5435
AUD/USD 0.5152 0.5117 0.0035 0.5115 0.5167
USD/JPY found continued support from Japanese names on the downside and
bounced to 122.27 in early morning trade. But the pair failed to bounce above
the 122.50 Gann 50-point pivot, which targets 122.00 and 123.00, because of
defense of options plays.
Japanese Finance Minister Masajuro Shiokawa demonstrated caution on the
strengthening of the yen against the U.S. dollar to 121.39 overnight, but
failed to give market players a strong warning against further yen
strengthening. Shiokawa said it is unclear whether the overnight move was due
to speculative moves or is a normal display of proper market function.
Japan's Cabinet Office revised down the official economic assessment in its
August economic report released Friday, saying: "The economy is deteriorating
further." The downward revision was mainly caused by worsening in production,
employment conditions, housing construction and capital investment, the office
said.
Virtually assured success after the Liberal Democratic Party's landslide
victory in the July upper house elections, Prime Minister Junichiro Koizumi was
chosen to serve another two-year term as head of the most powerful political
party in Japan, according an LDP aide. There were no other contenders for the
post and so no party election was held.
The outlook is neutral within an inside range.
Support: 121.74 (overnight low), 121.35 (Aug. 9 trough), 121.05 (Gann
50-point pivot; targets: 120.55/121.55).
Resistance: 122.40 (overnight high), 122.50 (Gann 50-point pivot; targets:
122.00/123.00), 123.05 (60-day moving average), 123.09 (100-day moving
average), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 123.87 (20-day
moving average), 125.50 (Gann 50-point pivot; targets: 125.00/126.00).
EUR/USD has been lifted to a fresh 3-month high of 0.8952, though USD/CHF
has held above the overnight low of 1.6850. Dealers say the SNB was in the
market below 1.5050 in EUR/CHF on Thursday, and that there is caution to bid
the CHF higher as the Bank is thought to be waiting in the wings to act if it
gains ground too rapidly. EUR/CHF has tracked the EUR higher elsewhere to a
5-day high of 1.5097.
Germany's trade surplus in June reached a provisional 13.7 billion Deutsche
marks, compared with a revised 14.8-billion-mark surplus in May, the Federal
Statistics Office in Wiesbaden said. While trade balance data was mostly in
line with forecasts, the German June current account unexpectedly turned into a
deficit, measuring 8.7 billion marks, compared with a revised 0.3-billion-mark
surplus in May.
The EUR/USD outlook is mixed, with the upside resisted at 0.8963 by the 50%
Fibonacci retracement level of the June-October downtrend.
Support: 0.8911 (overnight low), 0.8901 (200-day moving average), 0.8848
(61.8% Fibonacci retracement level of the Nov. 27-Jan. 5 uptrend), 0.8790
(38.2% Fibonacci retracement level of the June-October downtrend), 0.8766
(20-day moving average), 0.8350 (July 6 low; 7-month low).
Resistance: 0.8952 (overnight high; 3-month high), 0.8963 (50% Fibonacci
retracement level of the June-October downtrend), 0.9091 (April 5 high), 0.9136
(61.8% Fibonacci retracement level of the June-October downtrend).
EUR/JPY rose within Thursday's range after finding support from the 20-day
moving average at 108.59.
The outlook is mixed.
Support: 108.65 (overnight low), 108.59 (20-day moving average), 107.44
(100-day moving average), 106.02 (60-day moving average), 105.80 (38.2%
Fibonacci retracement level of May 1999-October 2000 downtrend), 105.91
(200-day moving average), 104.54 (June 20 low).
Resistance: 109.45 (overnight high), 110.15 (Aug 2 high; 3-month peak),
111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend).
GBP/USD treaded quietly within Thursday's range.
The intraday outlook is neutral.
Support: 1.4244 (overnight low), 1.4220 (20-day moving average), 1.4208
(100-day moving average), 1.4130 (60-day moving average), 1.3911 (June 20 low),
1.3688 (June 12 low; 15 1/2-year low), 1.3660 (February 1986 trough).
Resistance: 1.4276 (overnight high), 1.4353 (Aug. 2 high; 2 1/2-month
peak), 1.4414 (May 21 peak).
© 1999-2024 Forex EuroClub
All rights reserved