Daily Market Technicals 6/12/2000

Yesterday Events

It was a positive day for bulls in both the usd and the equities in particular.Fed Chairman Alan Greenspan delivered some comforting economic news in a speech today where he expressed the sensitivity of the fed to an economic slowdown and an implication that the rate hikes have come to an end. This news seemed to be welcomed even more intently in contrast to the recent legal confusion and uncertainty with the nasdaq rallying a rousing 9 pct and the dow rising 3 pct. The usd/jpy traded up to the 111.20 level, the/usd chf up to the 1.7150 level, the eur/usd down to the .8780 level and the stg/usd down to the 1.4310 level. On the political end, it seems the usd buying has been built in already as there is light at the end of the tunnel. However, the last gasp of intense focus now for the Gore campaign will shift to the alleged illegal absentee ballot applications in Seminole and Martin counties. These suits will commence tomorrow and the real potential for a usd sell-off would hinge on any dramatic developments in these cases. Barring this, it would appear that the major court decisions will be out of the way by December 12, the day designated for submitting electors, and the path seems much clearer now for Bush. So, the usd and the equities like the shortly anticipated conclusion of the presidential race and the recent comments from the fed. Conversely, these markets are still a bit uneasy about the remaining cases yet to be heard, where the risk/reward may very well be more favorable than the goodwill usd buying we have recently seen.

EUR-USD

Currency strategy: Target 0.8720 Short at 0.8850 Stop Lowered 0.8850

Resistance: 0.8905 0.8850 0.8820

Support: 0.8780 0.8754 0.8718

Failure to hold upside probes above the 0.8800 level favour return to test 0.8780 support. The breakdown from 0.8820/00 area see potential for pullback below the 0.8754/50 support to 0.8718, to correct 38.2% of the upmove from 0.8372 low. Setback from the 0.8932 high is seen corrective of deeply overbought daily posture with the 0.8820 reverting to resistance ahead of the firmer 0.8850 level.

GBP-USD

Currency strategy: Target 1.4400 Long at 1.4325 Stop at 1.4290

Resistance: 1.4500 1.4420 1.4370

Support: 1.4318 1.4305 1.4230

Hold above the 1.4318 level see longs cautiously favoured towards the 1.4400/20 area. However, the downside remains vulnerable and break below 1.4318/10 Fibonacci/chart support would allow for stronger pullback to the 1.4270/50 support to correct 50% of the upmove from 1.3960 low. Upside see 1.4370 initial resistance ahead of the firmer 1.4400/20 area. Above this needed to regain upside momentum

USD-JPY

Currency strategy: Target 112.00 Long at 111.10 Stop at 110.60

Resistance:112.00 111.46 111.38

Support:110.90 110.48 110.30

Maintains a consolidative tone with failure to sustain above the 111.00 level risking setback to the 110.60 stop. Break below this would call for retest of the 110.30 support and see risk for stronger setback towards the 109.80/60 former resistance zone. Pullback from the 112.00 high seen as corrective with the positive overall outlook favouring a return to bull play after this corrective phase.

EUR-CZK

Currency strategy: Stop shorts Buy dips Stop at 34.50

Resistance:35.250 35.070 34.820

Support:34.150 34.000 33.900

Upmove since 23-Nov looks to have gained strength. With dips having been underpinned by three channel supports which came in at the 34.10/33.90 zone. The strong reaction through the resistance line from the 04-Oct high is positive with acitivity holding above this at 34.80. This also coincides with congestion on daily charts. Channel resistance from the May highs is next target at 35.30.

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