14 November 2001, 10:24 : TECHNICALS-Forex market views and key levels
ANDREW CHAVERIAT, TECHNICAL ANALYST, BNP PARIBAS:
DOLLAR/YEN: "A bullish development today for the dollar as
it logs its first three-consecutive-day advance since the Oct.
25 high. This, combined with yesterday's 119.70 yen spike low
occurring at a 50 percent time/price retracement, suggests the
October-November selloff (123.35-119.70 yen) is complete,
laying the way for re-testing and exceeding 123.35 yen. Further
evidence of the power of the dollar rally is today's breakout
above the late-October downtrend at 120.95 yen. The September
115.85 yen low was a significant long-term low marking
termination of a large ABC correction occurring between
April-September (126.85-115.85 yen). With this ABC correction
complete, the September 115.85 yen low lays the groundwork for
renewing the long-standing 1999 rally off 101.30 yen eventually
targeting new cycle highs in the 127.50-130 yen area. The
recent September-October rally from 115.85-123.35 yen marked
the initial advance in what should be a five-wave impulsive
rise off the September low. The market then completed a classic
50 percent wave 2 correction (123.35-119.70 yen) Monday, with
wave three now underway. Monday's low at 119.70 yen achieved a
50 percent time retracement and nearly a 50 percent price
retracement (119.60 yen) to the September-October rally
(115.85-123.35 yen) -- effectively attaining a 50 percent
time/price pullback via squaring price and time -- a strong
signal that selling pressure has been exhausted.
"The market rejected the sub-120 yen area during the past
three sessions -- holding above this level on a New York
closing basis -- and combined with bearish short-term
divergence at yesterday's spike low also suggests the October
correction (123.35-119.70 yen) is complete."
"Strategy: buy pullback to 120.85 yen; stop loss at 120.25
yen; targeting renewal of the September rally toward 123.35+
yen."
EURO/YEN: "The cross has built a mini-base of support at
last week's 106.85 yen low reinforced by the 106.15/105.55 yen
September lows. This area may come under attack again this week
pressured by bearish daily momentum. Note the recent Thursday
-Monday rebound (106.85-108.02 yen) ran out of steam ahead of
last week's 108.15/20 yen breakpoint resistance. With
dollar/yen apparently having bottomed at yesterday's 119.70 yen
low, the cross would normally find some support -- but it is
being dragged lower by today's more dramatic euro/dollar
breakdown.
"Wave outlook: look for completion of November decline off
110.80 yen as the present wave five decline (off 108.02 yen)
targets a test of 106.15-105.55 yen."
ROMAN DUTKEWYCH, TECHNICAL ANALYST, LEHMAN BROTHERS:
EURO/DOLLAR: "I think that 88.70 cents and 89.15 cents are
upside resistance points and you need a close above 89.15 cents
to saying anything positive now. This was a pretty good
break-down here."
"The next big level is 87.25 cents which is 62 percent
retracement from the July lows to the highs we had in
September. Wait for a strong close before buying again."
DOLLAR/YEN: "A sharp reversal today. 121.40 yen and 121.10
yen should act as a good support for the next day. From here we
chop back up to 122.60/70 yen area. The decline we had was
primarily a liquidation event. This move down to 119.70 yen
washed out almost 50 percent of the long positions that have
been built up in the market for the past few two weeks. With
today's close the broader uptrend in dollar/yen will likely
resume."
U.S. DOLLAR/CANADIAN DOLLAR: "With less than a cent from
its all-time high set on Friday, I think there is a very good
set up to buy Canada and sell U.S. dollars with a target of
C$1.5770. Given that the CRB index has picked up in the last
week or so, it may cause some traders to look at the commodity
currencies to take advantage of the relationship. Given that
Canada has been the worst performer among that class, it might
have the most room to go."
© 1999-2024 Forex EuroClub
All rights reserved