16 November 2001, 10:10 : TECHNICALS-Forex market views and key levels
KEN BOYER, TECHNICAL ANALYST AT STANDARD AND POOR'S MMS:
AUSTRALIAN DOLLAR/U.S. DOLLAR: "Potential is for near term
buying opportunities to develop into the sessions ahead.
Expectations are for the $0.5110/00 area to essentially hold,
at chart and trendline support drawn off of the important Sept.
20 low. Initial support at 0.5170 is vulnerable to giving way
late this week, but look for buying to redevelop just below
0.5150.
Looking ahead, the uptrend targets eventual tests in the
weeks ahead above 0.5300 in line with the two month uptrending
channel."
DOLLAR/YEN: "Immediate attention shifts to the roughly
defined 122.50-121.50 yen zone: A developing hourly bearish
divergence is noted, and although 121.50/63 is the immediate
attraction on upticks, look for profit-taking interest on longs
plus some attempts at downside corrective selling plays to
develop. Intraday the 122.00 area is the trigger for a downside
correction to the 121.50/47 target, before some near term
buying interest redevelops."
DOLLAR/SWISS FRANC: "Rejection yesterday from the 2 percent
envelope as well as the previous return line drawn up from the
1.5670 francs low suggest some kind of (corrective) pullback is
needed. The 1.6705 area is anticipated to cap today and give
scope for a move back toward 1.6554-1.6502. We would actually
need to lose support at 1.6422 to favor the downside again.
Gains above 1.6705 will trigger a run at 1.6805/20."
JOSEPH KLETTNER, TECHNICAL ANALYST, COMMERZBANK:
AUSTRALIAN DOLLAR/U.S. DOLLAR: "For some time, we have been
suggesting that before the decline in wave 5 from the Aug. 22
high of $0.5394 is complete, it should unfold in a diagonal 5
wave pattern. So far, we have counted 4 waves down and we were
anticipating wave 5 to take prices below .4775 for an important
bottom. We were looking for a decline below support at .4956 as
a confirmation that the Oct. 15th high of .5173 completed wave
4 and that wave 5 in the diagonal 5 wave decline from .5394 was
underway to new lows. However, the decline from .5173, the Oct.
15 high never got below .5001 let alone .4956. As a result, we
started to loose faith in this scenario on Nov. 1 when the
market rallied from .5001 through resistance at .5096.
Sustained strength on Nov. 12 through .5173/76, the last
key short and medium-term pivot and the 61.8 percent
retracement from .5394 has convinced us that the decline from
.5394 has already bottomed at .4823, the Sept. 21 low and that
prices are headed back up toward .5394. In the meantime,
support for the week remains at .5118/.5082 which we expect
will maintain any setbacks from Wednesday's close. Now that
prices are through .5176, the only resistance left before .5394
is .5315, the 3 percent trading band.
EURO/DOLLAR: "The lack of upside follow through and the
market's inability to sustain itself above the weekly
resistance was a clear signal that the rally to $0.9017 on
Monday was nothing more than a false break driven by the
American Airline crash rather then by market direction. So far,
the decline to .8771 on Wednesday from Monday's high has been
cushioned by the support of the lower 2 percent trading band
which is now situated at .8722. Just before this band, we see
additional support at .8736 which represents the 61.8 percent
retracement of the advance from the July low of .8350. If any
bounces develop from Wednesday's low, we would expect them to
be short lived with the market running into strong resistance
around the .8894/.9007 area. Failure to get through this
resistance should lead to another round of selling with prices
testing .8736/22, the two support levels just mentioned. A
break of .8736 would be very bearish since this would open the
way for further weakness and a test of the July low of .8350
and the Oct. 2000 record low of .8224. In order for the EUR to
avoid this scenario the market would have to rally through the
.8904/.9007 resistance area."
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