Daily Market Technicals 19/12/2000

Price-action in early Asian trading suggests that operators are squaring up positions ahead of tomorrows FOMC meeting. In recent days speculation has increased that the Fed might take a more aggressive stance to head off a recession in the United States. Despite the shift in market sentiment, there seems to be great variation throughout the market regarding the particular action the Fed will take. This uncertainty has spurred dealers and other players to take profits on long EURUSD and USDJPY positions in order to avoid the perils of an unexpected move by the Fed. USDJPY traded today in a 112.03-112.26 range. USDJPY is currently bounded by short-term technical support at 111.80 and 111.40 and a longer-term resistance level at 112.80. EURUSD traded in a .8930-8957 range, giving back a little ground after reaching a 3 month high of .9017 yesterday. USDCHF and GBPUSD were relatively quiet today with little specific news or flows motivate movement. AUDUSD and NZDUSD eased off a bit after making fresh highs yesterday in New York.

EUR-USD

Range trade Sell at 0.9000 Buy at 0.8900

Resistance:0.90400.90140.9000

Support:0.89000.88300.8792

Retreat in the morning has seen an intraday low of 0.8930 as the market retreats from the high of 0.9014 at the topside of the bull channel. In the broader picture modest dips are seen as corrective buy opportunities with good support noted in the region of Friday's low & the 0.382 Fibo retracement of 0.8904/00. While above here the market retains near term potential for an extension abv 0.9014 toward 0.9060.

GBP/USD

Target 1.4650 Sell at 1.4790 Stop at 1.4820

Resistance:1.48741.48101.4790

Support:1.46501.45801.4542

With the strong barrier seen at the 1.4800/10 regions plus the bearish divergence on daily tools,would contemplate picking top with stops just above the 1.4810 as breach of the latter, would trigger stronger upmoves towards next hurdle seen at 1.4885. Any lower retreat to be treated as corrective with the up- trend line drawn fr the 24-Nov low keeping downside well- protected at 1.4580 with intervening suppt seen at 1.4650

USD-JPY

Target 112.75 Long at 112.10 Stop at 111.80

Resistance:113.62113.00112.80

Support:111.85111.71111.50

Inability to extend the rally above 112.75/80 toward next overhead targets of 113.00 and 113.62 has instead seen the market retreat below 112.00 to the lower end of the 112.80-111.85 congestion band. This move coincides with the appearance of bearish divergence on daily techs which demands close monitoring of stops in the 111.80 region. Failure here to tgt 111.50/45 then 111.00. View as corrective retreat

EUR-CZK

Target 35.20 Long at 34.70 Stop at 34.50

Resistance:35.25035.20035.080

Support:34.65034.60034.450

Has eased back since Friday though the 34.50 stops level is intact to keep focus on buying unless a sustained breach of the 34.60 congestion zone is seen.In this case risk would be for pullback to the 61.8% Fibo at 34.32. Overall the upmove since last month has been underpinned by three channel supports which came in at the 34.10/33.70 zone. Upside target is 35.08 ahead of 35.20 channel resist.

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