Daily Market Technicals 19/03/2001

A relatively calm session in the currency markets despite the yens recent volatility. All eyes were focusing on an announcement from the Bank of Japan regarding interest rates. Expectations are that the bank will return to its zero interest rate policy (ZIRP) and this will continue to weigh on the currency. Haruhiko Koruda, a top Japanese financial diplomat said that Japan would not coordinate an effort with the US to weaken the yen. This provided some support for the currency as it rose from its lows at 123.50 to 123.10 also helped along by a rebounding Nikkei. The pair was trading at 123.35 by mid Tokyo afternoon. Trading in the other majors was confined to very narrow ranges as traders wait to see what happens to the US stock market at its open.

EUR-USD

Wait Reaction Of A Break Of 0.8909

Resistance:0.90500.90170.9000 

Support:0.89090.88780.8845

Confined to a neutral tone within the trading range seen Friday with 0.8930 minor support ahead of 0.8916 low. Upticks are seen as sell with initial resistance seen at 0.9000/20 area and a firmer level placed at the 0.9092, the 38.2% retracement of the 0.9378/0.8916 decline. Look for breakdown from 0.8916/09 chart/50% Fibonacci support to open 0.8880 and then 0.8850/00 congestive zone to test.

GBP-USD

Wait Reaction Towards The 1.4420/50 Zone

Resistance:1.44301.43801.4330

Support:1.42651.42301.4138

Retains a weak tone despite the oversold daily technical posture and upticks are seen as corrective and provide selling opportunity into the 1.4420/50 former support zone. Breakdown from the 1.4400 support last week leaves the downside vulnerable and see potential to the 1.3952/1.4000 lows with 1.4200 level intervening. Would prefer to sell into upticks ahead of 1.4420/50 resistance zone.

USD-JPY

Target 123.65 Long at 121.60 Raised stop to 122.20

Resistance:124.00123.65123.50

Support:122.44121.86121.20

Holds supportive tone above the 123.00 level with bull play targeting 123.65 next though bear divergence on hourly tools favour caution. Beyond this see potential to 124.42 to correct 50% of the Aug-98/Nov-99 decline though see the 124.75/125.00 area likely to cap. Downside see supports at 122.50 and 121.80/122.00 zone. The latter marks low of last Friday and only break here would put bull play on hold.

EUR-CZK

Target 34.00 Sell at 34.60 Raise stop to 34.85

Resistance:35.10034.95034.600

Support:34.45034.35034.150

Is on a weak footing this week having triggered stops on shorts at 35.50. Also the violation of the support line from the 34.35 low at 15-Feb weighs on the rate. Scope is now for retest of the 34.35 low which would open up the 34.00 psych level again. Below here focus would be on the 33.75 synthetic low from Aug-98. On the upside 34.60 congestion offers initial resistance.

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