24 May 2001, 17:20 US FX Daily Outlook: Profit taking vaults euro off 6-month low (part 2)
* EUR/USD rose with EUR/JPY from Asia's 6-month low of 0.8480 to an
intraday high of 0.8613. Italy's consumer confidence index for May
provided some long-awaited good fundamental news for the EUR, rising to a
1-year high of 125.4 from 122.9 in April.
Jitters also remained about possible ECB intervention after the BBK
was rumored to buy EUR/USD for commercial purposes overnight. BridgeNews
has learnt that the ECB is closed today, although with other Eurosystem
central banks open this does not necessary preclude intervention.
The outlook is mixed to slightly bullish.
Support: 0.8480 (overnight low; 6-month low), 0.8416 (support line
declining since Jan. 25), 0.8372 (Nov. 23 low).
Resistance: 0.8609 (overnight high), 0.8790 (38.2% Fibonacci
retracement level of the June-October downtrend), 0.8848 (61.8% Fibonacci
retracement level of the Nov. 27-Jan. 5 uptrend), 0.8814 (20-day moving
average), 0.8921 (200-day moving average), 0.8963 (50% Fibonacci
retracement level of the June-Oct.
downtrend).
* USD/JPY was less impressive, although it managed to hold above the 2 1/2
month low of 118.80 touched in Asia after Japanese Minister for Economic
and Fiscal Policy Heizo Takenaka said the JPY's strengthening on Wednesday
was "OK."
The outlook is mixed.
Support: 119.65 (Gann 50-point pivot; targets: 119.15/120.15), 119.00
(38.2% Fibonacci retracement level of the August 1998-December 1999
downtrend), 118.80 (overnight low), 118.25 ( Gann 50-point pivot; targets:
117.75/118.75).
Resistance: 120.43 (overnight high), 121.05 (Gann 50-point pivot;
targets: 120.55/121.55), 122.26 (20-day moving average), 122.49 (60-day
moving average), 122.50 (Gann 50-point pivot; targets: 122.00/123.00).
* EUR/JPY continued to direct traffic. After plunging to a 5-month low of
101.04 in Asia and dragging USD/JPY and EUR/JPY down in its wake, talk of
profit-taking from a couple of U.S. banks pushed it higher in Europe.
Japanese Finance Minister for International Affairs Kuroda also lent a
hand by repeating Japan would take appropriate action if unnatural
currency moves continued.
However, the cross still remained below the 103.62 peak touched briefly in
Asia following unconfirmed (and now widely doubted) rumors of BOJ
intervention.
The outlook is slightly bullish.
Support: 101.04 (overnight low; 5-month low), 100.00 (psychological
level), 97.22 (Dec. 12 trough).
Resistance: 103.15 (overnight high), 105.80 (38.2% Fibonacci
retracement level of May 1999-October 2000 downtrend),107.75 (20-day
moving average), 109.11 (100-day moving average), 109.55 (60-day moving
average).
GBP/USD had a rocky morning, despite growing signs of a rift between
U.K. Chancellor Brown and U.K. Prime Minister Blair over EMU-entry.
A U.S. investment bank was said to sell cable down to a 6-month low of
1.4118, while EUR/GBP climbed to a 2-day high of 0.6074. Another gloomy
CBI survey of the U.K.'s industrial sector didn't help, although the
headline total orders index was not as bad as rumored shortly before the
release, coming in at -24 for May.
The outlook is mixed.
Support: 1.4118 (overnight low; 6-month low), 1.3966 (Nov. 24 trough).
Resistance: 1.4197 (overnight high), 1.4291 (20-day moving average),
1.4360 (60-day moving average), 1.4402 (61.8% Fibonacci retracement level
of Nov.-Jan. uptrend), 1.4534 (50% Fibonacci retracement level of the
Nov.-Jan.
rally), 1.4465 (100-day moving average), 1.4666 (38.2% Fibonacci
retracement level of the Nov.-Jan. rally).
© 1999-2024 Forex EuroClub
All rights reserved