26 October 2001, 14:36  TECHNICALS-Forex market outlook and key levels

LONDON, Oct 26 - Following is a selection of comments from analysts on important technical developments in the foreign exchange market.
* EURO/DOLLAR: "Whilst respective nearby resistances of $0.8980, $0.9040 and $0.9140 (max) continue to cap the upside, the immediate-term risk remains on the downside towards $0.8820-25 short-term pivotal support. A firm penetration of which would open lower window towards $0.8650. Overall, it needs a breach above $0.9140 to violate the downtrend and would argue a rebound towards $0.9250. Investors should stay with the short of $0.9010. Stop above $0.8980, for a possible downswing towards $0.8650 in next few weeks."

* DOLLAR/YEN: "Whilst 122.45 continues to hold the downside, the immediate-term risk remains on the upside. A breach above 123.40 should open next target window of 124.25 then 125.37. But a fall beneath 122.45 would suggest a downward correction towards 121.50-80 before meeting another opportunity of resuming the short-term uptrend. Intraday traders can go long near 122.80, with stop below 122.45 or after the penetration of 124.20 with stop below 122.85 for a spike towards 124.20."

* STERLING/DOLLAR: "The daily chart is forming a bullish divergence against the price. This suggests that the pound has entered an upward correction phase. Whilst $1.4230 holds the downside, looks for the pound to rebound slightly higher towards $1.4350 and possibly $1.4390-$1.4420 before meeting renewed downward pressure. Overall, unless the pound can strengthen above $1.4520, the short-term downtrend remains intact. Intraday traders can go long near $1.4265, with stop and reverse below $1.4230, for a possible rebound towards $1.4350 in the immediate-term. But if reversed to short at $1.4230, fresh stop above $1.4280 and to take profit near $1.4130."

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