Daily Market Technicals 20/12/2000

The euro remained strong during Asia today in the aftermath of the US rate decision yesterday. The FOMC had decided to leave rates unchanged but indicated that their bias had now changed from tightening to easing, bypassing the neutral status which had cause for concern among holders of US dollars initially. Us tech stocks suffered dearly as the Nasdaq plummeted towards the close to end down 4.3% with the Japanese Nikkei 225 continuing the trend early Tokyo. But the Nikkei managed to salvage some of the damage down only 0.5% by mid Tokyo afternoon. USDJPY opened at 112.38/41 and rallied in the morning to make a high at 112.83 but slid back to 112.65 at the close. The euro opened at 0.8950/53 and climbed to close at 0.8980/83. With most traders focusing now on the state of the US economy the euro has become somewhat of a safehaven currency temporarily even though Europe has not performing particularly well. Also keeping the euro supported is the continued recent up trend based on the belief that the currency is way undervalued. AUDUSD also had made a significant move higher today breaking above the 0.5460 level where there were rumored large stop loss orders. The currency closed at 0.5478/80 after making a high of 0.5483. NZDUSD coat tailed the Aussie from 0.4300 to finish the session at 0.4338/43 close to its high. USDCHF eased from 1.6835 to 1.6790 with the euros rise. GBPUSD also climbed in line with the euro with no liquidity in the market pushing higher to close at 1.4710.

EUR-USD

Target 0.9054 Long at 0.8950 Stop at 0.8915

Resistance:0.90400.90140.8985

Support:0.89200.88780.8828

Push above the 0.8960 level has now seen market lift to 0.8985 as market climbs away from recent dip to 0.8878. Sustained lift above 0.8960 clears the way for a potential retest of the 0.9014 rally high and continuation above here toward the convergence of the 200-day ma and the topside of the bull channel in the 0.9054/60 region. Minor initial support at 0.8920 now seen protecting the 0.8878 low.

GBP/USD

Target 1.4620 Sell at 1.4745 Stop at 1.4775

Resistance:1.48101.47901.4760

Support:1.46201.46091.4585

Trading below the strong 1.4800/10 barriers and current prices remains on a subdued tone with Monday's Hanging-man, confirmed by a black candle yesterday. However, for further downside probe to be triggered, the support line at 1.4620, drawn fr the 24-Nov low, need to be broken with intervening support seen by previous day's low of 1.4609. The daily indicators are seen cutting downward fr overbought areas.

USD/JPY

Target 113.62 Long at 112.50 Stop at 111.70

Resistance:113.62113.00112.86

Support:112.32111.78111.50/45

Firm session has seen the market probing recent rally highs with a minor extension to 112.86. With the medium term outlook remaining firmly fixed on the upside bias favours buying modest dips while above 112.00 with minor interim support noted at 112.32. Extension of the rally above 112.86 will initially target 113.00 then 113.62 with distant targets of 116.60/90. Favour stops below 111.78 as daily techs lag price action

EUR/CZK

Target 35.20 Long at 34.70 Stop at 34.50

Resistance:35.20035.08035.000

Support:34.60034.54034.450

Has eased back since Friday though the 34.50 stop level is intact to keep focus on buying unless a sustained breach of the 34.60 congestion zone is seen.In this case risk would be for pullback to the 61.8% Fibo at 34.32. Overall the upmove since last month has been underpinned by three channel supports which came in at the 34.10/33.70 zone. Upside target is 35.08 ahead of 35.20 channel resist.

www.nicorp.org