29 August 2001, 20:31 US FX Daily Outlook: GDP data provides slight dollar support
Jim Cote
Chicago, August 29 (BridgeNews) - The dollar firmed slightly as U.S. gross
domestic product managed a gain at a seasonally adjusted annual rate of just
0.2%, the Commerce Department reported Wednesday. Yen traders are focused
instead on the battle between the 119 and 120 figures where knock-out options
are said to exist. The euro was already weak but slipped a little futrther in
response to the GDP data.
Current Previous Change Global Global
NY open NY close low high
USD/JPY 119.40 120.02 -0.62 119.35 120.10
EUR/USD 0.9111 0.9122 -0.0011 0.9102 0.9150
EUR/JPY 108.81 109.51 -0.70 108.78 109.66
GBP/USD 1.4528 1.4527 0.0001 1.4513 1.4569
USD/CHF 1.6655 1.6630 0.0025 1.6586 1.6668
USD/CAD 1.5404 1.5388 0.0016 1.5382 1.5412
AUD/USD 0.5289 0.5300 -0.0011 0.5285 0.5317
USD/JPY drifted to an overnight low of 119.76 as short-term players were
squeezed out. A larger number of knock-out options with 119.00 strikes are said
to be in the market.
BOJ Governor Hayami said that stable FX moves which reflect fundamentals
are desirable, and that the view that the central bank allows deflation is a
misunderstanding.
The Nikkei Shimbum reported that Japanese Prime Minister Koizumi has
decided on a 2 trillion to 3 trillion JPY supplementary budget for fiscal year
2001.
The Japanese stock market continued to fall Wednesday, with the Nikkei 225
Stock Average breaking the psychologically important 11,000 level for the first
time since October 1984 on broad-based selling pressure after steep falls on
Wall Street overnight. Banking shares, in particular, were hit by media reports
of the government's new plans to resolve bad loans. The Nikkei 225 Stock
Average closed down 209.64 points, or 1.9%, at 10,979.76. BridgeNews
The outlook is bearish.
Support: 119.35 (overnight low), 119.65 (Gann 50-point pivot; targets:
119.15/120.15), 119.05 (Aug. 15 low; 2-month low), 119.00 (38.2% Fibonacci
retracement level of the August 1998-December 1999 downtrend), 118.30 (June
1 low; 3-month low), 118.25 (Gann 50-point pivot; targets: 117.75/118.75).
Resistance: 120.10 (overnight high), 121.05 (Gann 50-point pivot; targets:
120.55/121.55), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 122.54
(100-day moving average), 123.00 (60-day moving average), 121.32 (20-day moving
average), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 125.50 (Gann
50-point pivot; targets: 125.00/126.00), 126.15 (July 6 high; 3-month high),
126.84 (April 2 high; 29-month high).
EUR/USD upside should be limited by diminishing hopes that the ECB will cut
interest rates Thursday.
EUR/USD continued to swerve around the 61.8% Fibonacci retracement level of
the June-October downtrend at 0.9136, but its subdued behavior is only the calm
before the storm. Key levels to watch Wednesday are 0.9240, the 5-month high
reached on Aug. 22, and 0.9028, the previous low. The pair managed to stay
above the rising 20-day moving average, currently at 0.9025, thus enhancing its
upside bias.
Italian preliminary August CPI was unchanged from last month to give a 2.8%
year-on-year rise, in line with cities data released earlier in the month.
Euro-zone June trade data may be released during the day while the
Conference Board's German leading and coincident indicators for July are due at
1330 GMT.
The outlook is bearish.
Support: 0.9114 (overnight low), 0.9136 (61.8% Fibonacci retracement
level of the June-October downtrend), 0.9080 (Aug. 21 low), 0.8963 (50%
Fibonacci retracement level of the June-October downtrend), 0.9023 (20-day
moving average).
Resistance: 0.9150 (overnight high), 0.9240 (Aug. 22 high; 5-month high),
0.9382 (March 2 peak), 0.9446 (Feb. 1 peak), 0.9595 (Jan. 5 high; six-month
peak).
EUR/JPY continued to decline on euro weakness.
The outlook is bearish.
Support: 108.83 (overnight low), 109.47 (20-day moving average), 107.44
(60-day moving average), 105.80 (38.2% Fibonacci retracement level of May
1999-October 2000 downtrend), 104.54 (June 20 low).
Resistance: 109.66 (overnight high), 110.63 (Aug 20 high; 3 1/2-month
peak), 111.02 (50% Fibonacci retracement level of May 1999-October 2000
downtrend), 113.71 (April 4 high; 17-month high).
GBP/USD gains are limited by the euro weakness.
The outlook is bearish.
Support: 1.4513 (overnight low), 1.4362 (20-day moving average), 1.4223
(100-day moving average), 1.4183 (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: 1.4569 (overnight high), 1.4560 (61.8% Fibonacci retracement of
January-June downtrend), 1.4584 (Aug. 22 high; 5-month high), 1.4756 (March 2
peak), 1.5100 (Jan. 8 peak, year high).
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