Daily Market Technicals 23/02/2001

Following the downgrade of Japanese sovereign debt by Standard and Poors USDJPY popped higher out of its recent range catching many New York dealers short. USDJPY spent the early part of the day squeezing higher to finally reach a high of 117.17. After reaching its peak offers re-emerged in the market as exporters and investors continued to repatriate Yen ahead of Japan’s fiscal year end on March 31. The market should provide good support in the 116.20-116.40 area that marked the start of USDJPY’s upward acceleration. EURUSD has been heavy so far today trading in a tight .9034-.9055 as the pair remained very close to fresh lows reached yesterday following the announcement that the Turkish lira would be allowed to float. USDCHF was quiet trading in a 1.6915-1.6952 range range. Similarly Sterling was also quiet, trading in a 1.4447-1.4480 range on no news.

EUR-USD

Target 0.9110 Long at 0.9040 Stop at 0.9010

Resistance:0.91300.91000.9050

Support:0.90170.89740.8910

Risk remains on downside though lackluster momentum limits losses and see potential for rebound from the 0.9030/24 chart and 200-day moving average. Oversold hourly tools suggest potential for upticks back to retest the 0.9110/30 former support zone. Would need a lift above this to put bears on hold and see recovery to test the 0.9200 trendline drawn from 0.9445 high.

GBP-USD

Target 1.4600 Buy at 1.4430 Stop at 1.4370

Resistance:1.46121.45461.4495

Support:1.44301.44081.4387/78

Retains a constructive tone with prospects seen for rebound to test the 1.4600/12 resistance. Look to buy dips into the 1.4430/00 area with stop placed just below recent lows. The doji session seen 20-Feb with spike low of 1.4312 is seen supportive and see potential for rebound. The 1.4600/12 chart level is also bear channel top drawn from 1.5103 high. Break to see test of 1.4695, 200-day MA.

USD-JPY

Target 117.80 Buy on dips Stop at 116.20

Resistance:117.95117.60117.10

Support:116.40116.00115.85

Failed to sustain gains above the 117.00 level but pullback seen as corrective and provide buy on pullback to the 116.40 and 116.00 supports. Return to test the 117.10/17, bear trendline and intraday high favoured and sustained break here would set up test of the 117.95 high seen 12-Feb. Only below 115.80 trendline support drawn from 114.52 low would put the bullish short term tone on hold.

EUR-CZK

Target 35.50 Long at 34.80 Stop at 34.35

Resistance:35.10034.90034.800

Support:34.40034.35034.150

Inability to overcome the 34.15/00 support area has seen buy stops triggered at 34.80. Note that 34.00 was a key psychological support area on synthetic weekly charts between Jul-98 and Jan-99. Taking this into account a buy dips strategy would be favoured following the inability to see breakdown in the recent days. On the upside through 34.80 and targets 34.90/35.10 zone.

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