22 October 2001, 10:51  TECHNICALS-Forex market outlook and key levels

LONDON, Oct 22 - Following is a selection of comments from analysts on important technical developments in the foreign exchange market.
GERRY CELAYA, CHIEF STRATEGIST, REDTOWER RESEARCH
* EURO/DOLLAR: "Euro/dollar ended last week on a soft note, more of the same ahead with a push below $0.8960 - 38.2 percent retrace of the gains from $0.8350 - favoured for $0.8840/25 -50 percent and key low - and then to $0.8730 - 61.8 percent. Upticks should remain limited to the $0.9035 trendline resistance zone, a break through this would set up $0.9065 and higher as euro bottom fishers enter the fray. Keep in mind that many have been going for the "buy the euro dip with $0.8960 risk" play and in fact, this could still work out. For choice though, downside risk is seen as having increased and a push towards $0.8730 seems more likely. The way implied behaved on Friday - down - suggests that the market is quite comfortable writing the downside for now though, need a break of $0.8960 and then $0.8840/25 to shake this up."
* DOLLAR/YEN: "In the yen, the dollar seems to be heading higher on a reluctant basis, for choice more gains will be seen this week. Technically this should set up 121.70 and then to 122.20 after that."
* EURO/YEN: "Euro/yen looks to trade sideways, a weaker euro is favoured to drag this one down eventually to 107.75 and lower, 109.60/90 holds on top."
* STERLING/DOLLAR: "Cable (sterling/dollar) the outlet currency is looking quite slumpy. With swings - 61.8 percent extensions - and retracement - 50 percent - targets clustering at $1.4260 bottom fishing on approaches to this area are favoured."

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