10 September 2001, 19:24 FULL: US FX Daily Outlook: Dollar bounces after Friday's slide
Cornelius Luca //
New York, Sept. 10 (BridgeNews) - The U.S. dollar is showing incipient
signs of recovery after sliding Friday in the wake of a much worse than
expected jobs data for August. Currency traders will keep their eyes on
the domestic stocks after Dow Jones Industrial Average's 2.4% drop dragged
the greenback down in the previous session. Treasury Secretary Paul
O'Neill's optimistic view that the U.S. economy will recover later this
year has yet to impact the markets.
A recent bout of demand vaulted dollar/yen, but the pair remained
confined by two key pivots at 119.65 and 121.05. (Story .879) Euro/dollar
fell from a six-day high of 0.9078, while dollar/Swiss franc reciprocated
with a rebound from a six-day low of 1.6718. Sterling/dollar remains firm
after extending its Friday's gains to a new six-month high of 1.6793,
while dollar/Canada trimmed gains after marking a fresh five-month high of
1.5696.
There are no market-moving domestic events scheduled before Friday's
August data, which feature producer price index, retail sales, and
industrial production and capacity utilization.
Current Previous Change Global Global
NY open NY close low high
USD/JPY 120.55 120.12 0.43 119.78 120.70
EUR/USD 0.9040 0.9073 -0.0033 0.9027 0.9078
EUR/JPY 108.99 109.00 -0.01 108.40 109.13
GBP/USD 1.4637 1.4615 0.0022 1.4610 1.4676
USD/CHF 1.6755 1.6728 0.0027 1.6718 1.6793
USD/CAD 1.5664 1.5655 0.0009 1.5659 1.5696
AUD/USD 0.5121 0.5189 -0.0068 0.5121 0.5192
Steady, if light, demand exploded in early U.S. trading, lifting USD/JPY
trough stops at 120.25. Resistance emerges at 121.05 from the Gann
50-point pivot that targets 120.55 and 121.55.
The market failed to react to Japanese officials' comment on the yen
and Japan's economic data.
Japanese Vice Finance Minister for International Affairs Haruhiko
Kuroda said the euro needed to recover further and yen strength was not in
line with fundamentals.
Vice Finance Minister Toshiro Muto also said the Ministry of Finance
will take appropriate action in the foreign exchange markets if necessary.
However, he also noted there are no options except monitoring the markets
for now.
Muto's comment failed to move the foreign exchange market.
The foreign exchange market has not been very sensitive to yen
comments by Japanese officials lately.
Japan's domestic wholesale price index fell 0.9% on year in August,
the Bank of Japan said. The August fall was the largest since September
1999 when the WPI declined 1.3%. The data indicated deflation pressure
remains strong.
Japan's machinery makers said the value of orders from the private
sector, excluding orders for ships and those from the electric power
industry, in July, was down an adjusted 1.6% on month. The figure is worse
than the average economists' outlook of a 0.8% drop.
The intraday outlook is slightly bullish, with buy-stops seen above
121.05.
Support: 120.07 (20-day moving average), 119.78 (overnight low),
119.65 (Gann 50-point pivot; targets: 119.15/120.15), 119.00 (38.2%
Fibonacci retracement level of the August 1998-December 1999 downtrend),
118.45 (Aug. 31 low; 3-month low), 118.30 (June 1 low; 3-month low),
118.25 (Gann 50-point pivot; targets: 117.75/118.75).
Resistance: 120.70 (overnight high), 121.05 (Gann 50-point pivot;
targets: 120.55/121.55), 121.53 (Sept. 6 high), 122.50 (Gann 50-point
pivot; targets: 122.00/123.00), 122.34 (100-day moving average), 122.77
(60-day moving average),
EUR/USD fell from a 6-day high of 0.9078 after failing to dislodge the
resistance of the 20-day moving average at 0.9087. The pair remains in a
mixed mode after its apparent downturn was reversed by poor U.S. data.
The intraday outlook is mixed..
Support: 0.9027 (overnight low), 0.8963 (50% Fibonacci retracement
level of the June-October downtrend), 0.8954 (200-day moving average),
0.8898 (38.2% Fibonacci retracement level of the July 6-Aug. 22 uptrend),
0.8824 (Sept. 6 low), 0.8793 (50% Fibonacci retracement level of the July
6-Aug. 22 uptrend), 0.8790 (38.2% Fibonacci retracement level of the
June-October downtrend), 0.8763 (60-day moving average).
Resistance: 0.9078 (overnight high), 0.9087 (20-day moving average),
0.9136 (61.8% Fibonacci retracement level of the June-October downtrend),
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 is trading water near a 10-day high of 109.13. The cross is
testing the support of the 20-day moving average at 109.09.
The intraday outlook is slightly bullish.
Support: 108.40 (overnight low), 107.99 (60-day moving average),
107.53 (200-day moving average), 107.18 (100-day moving average), 105.80
(38.2% Fibonacci retracement level of May 1999-October 2000 downtrend),
105.53 (Sept.
4 low; 2-month low), 104.54 (June 20 low).
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