Monday May 1, 2006 - 07:03:31 GMT
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Daily Technicals: Dollar descent becomes long-term: USDJPY to continue lower
by Marc Spaelti
EURUSD: The Dollar in near free-fall on Friday reached an 11-month high of 1.2640 this morning. This high weekly close leaves us bullish, the recent acceleration fits nicely into the last 2-weeks trend, its support lies at 1.2520 this morning, very strong initial support at 1.2595. While above expect to move on and make further gains, 1.2665 is 50% of the fall from 1.3665 down to 1.1665 in the course of 2005, next target is the 62% retracement point of 1.2900. For today look to sell tops as the rise is likely to slow down near 1.27, take profits after a return to 1.2550-ish.
GBPUSD: Cable exceeded expectations. Closing the week above the long-term resistance of 1.8230. Very steep rising trend-line at 1.8230 this morning, remain bullish while above, maximum upside is for 1.85 over the next 48h, realistic target is 1.8380, take profit on any longs if that level is seen by Tuesday night. To the downside, a breech of the 1.8230 support has room to 1.8130 with minor support at 1.8185 on the way down.
USDJPY: On Friday, USDJPY remained side-lined, following the overall sell-off, but closing the week at 113.60, but underneath of the important 113.90 level. This morning in Asia the pair has caught-up, falling to a 7-month low of 113.05 and outlook is bearish. Trend-line at 113.60 this morning, initial strong resistance 113.40, while underneath the pair can fall further to 112.80 initially, the next large target will be 109.25, very strong support at 111.55 on the way may limit the move this week.
USDCHF: The Dollar fell hard as expected and has made about two thirds of the move down to the 1.2260 target. Bearish trend-line at 1.2415, stronger resistance at 1.2440, key resistance higher at 1.2550. Bearish to complete the move to 1.2260 this week, initial support 1.2375 and minor support 1.2335.
Labor day / Bank Holiday in Europe - Markets closed in Germany, France, UK, Italy and parts of Switzerland
@12.30GMT US Personal Income March
@14.00GMT US ISM Manufacturing April
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