Daily Market Technicals 07/03/2001

We had a surprisingly quiet session early today despite numerous rumors regarding the eminent resignations of Japanese political and economic officials. These rumors were squarely denied. USDJPY exploded near the end of the session, breaking out of its 118.60-118.80 range amid comments that the BOJ would likely return to its zero interest rate policy in coordination with structural reforms that will include writing of bad debt by Japan’s financial institutions. In erratic panicked trading USDJPY moved up to 119.60. EURUSD was fairly subdued this session moving up slightly despite weak economic data out of Germany. AUDUSD was a big mover selling off 80 cents following a cut in interest rates by the Reserve Bank of Australia. NZDUSD also sold off in sympathy to the Ausssie rate cut. GBPUSD and USDCHF were very quiet despite the movements in the active currencies.

EUR-USD

Target 0.9370 Buy at 0.9300 Stop at 0.9270

Resistance:0.94450.93780.9350

Support:0.93000.92400.9200

Within reach of the 0.9378 high with the 0.9300 level seen offering support. Look to buy on dips with the 0.9270 marking stops as a break below this would likely return trading to a short term consolidative tone and leave the 0.9240 and 0.9200 support open to retest. Overall bull tone keep the focus for short term gains with the 0.9440/45 seen attracting beyond.

GBP-USD

Target 1.4800 Buy at 1.4615 Stop at 1.4570

Resistance:1.48001.47641.4726

Support:1.46601.46341.4612

Has edged up to test the 1.4700/10 resistance which is also the 200-day moving average. See sustained break above this to clear the way for retest of the 1.4764 high and see attraction to 1.4800/30 zone. The downside remains well protected while above the 1.4612/1.4570 former congested range top and see dips into this area as offering buying opportunities.

USD-JPY

Target 119.90 Buy at 119.10 Stop at 118.70

Resistance:119.75119.23119.15

Support:118.50118.2217.95

Breakout from the 119.15/20 resistance clears the way for retest of the 119.75/90 peaks. Minor trendline support on the hourly chart see support coming in at 118.80 and unless negated will keep buying strategies favoured. Look to buy dips into the 119.00 level with stops placed below 118.80. Longs aim for eventual break of the 119.90 to see extension to 120.50 and then 121.00/15.

EUR-CZK

Target 35.50 Long at 34.80 Stop at 34.35

Resistance:35.32035.10034.950

Support:34.60034.40034.350

Inability to overcome the 34.15/00 support area last 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 recent weeks. On the upside through 34.90/95 and targets 35.00/10 zone.

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