Daily Market Technicals 01/03/2001

USDJPY remained relatively firm in early Asian trading following yesterday’s surprise rate cut by the Bank of Japan. The dollar surged to a 2 week high of 117.58 before offers re emerged pulling the dollar down to a session low of 117.23. The rate cut was a reaction to a slide in the Nikkei that took the benchmark average to a 15 year low. The lower Yen interest rates will provide investor’s incentive to put on the “Yen carry” trade where Yen are borrowed at low interest rates and then invested abroad in currencies that provide a higher yield. The expectation that the Fed will provide further cuts in interest rates in the US has many investors choosing to buy Euros instead of dollars for Yen. These flows have provided substantial support in EURUSD. EURUSD sustained most of yesterday’s gains trading in a .9229-.9246 range in quiet trading. USDCHF saw no notable flows as the pair closely mirrored the movements observed in EURUSD. GBPUSD traded in a very tight 1.4451-1.4471 range. AUDUSD and NZDUSD were lifeless today drifting aimlessly with very little trading going on. peaceful between 0.5240 and 0.5255 and 0.4293 and 0.4319. 

EUR-USD

Target 0.9332 Long at 0.9240 Stop at 0.9215

Resistance:0.93000.92800.9265

Support: 0.92260.91780.9116

Has slipped fractionally in late Asian trade but there remains little overall change on the day. Firm daily techs and recent attempts to push above the 30-day ma favour longs for an attempt to lift above 0.9256 toward pivotal region of 0.9260/65. Break above latter is needed to unlock door to further gains toward 0.9332. Favour initial stop for weak longs just below hrly support at 0.9226. Reassess below 0.9178

GBP-USD

Target 1.4610 Buy at 1.4400 Stop at 1.4370

Resistance:1.45701.45501.4504

Support:1.43901.43781.4312

Prices seen congesting with- in a bear-channel seen from the 1.5105 high with the base support seen at 1.4390 and holding above this level risk the formation of the right shoulder of an inverted Head- shoulder (S-H-S) formation and the trigger-point would be a breach above the neckline seen at 1.4550 as well as the downtrend line at 1.4570. Setback below 1.4390 would negate this bullish formation and see 1.4312 attempted.

USD-JPY

Target 117.95 Long at 116.45 Stop at 117.05

Resistance:118.40117.95117.60

Support:117.10116.59116.32

Market seen weakening marginally in late Asian trade but remains above support at 117.10 at this time. While above here focus remains on additional gains. A sustained push above 117.50/60 will initially see the market targeting the 117.95/118.40 resistance band. Extension above here will eventually see the bull high of 119.90 exposed to retest. Stop weak longs below 117.10 with break here to target 116.60.

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 this month saw 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 35.00/10 zone.

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