Trading News Archive - August 2007
Bank Recommendation
GBP should pierce 2.02Sagiv Perez 
31 August 2007
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ABN AMRO PRIVATE BANKING
EUR/USD: "The market looks to be building a bullish pattern, the so-called ascending triangle. Holding above the supporting line at $1.3600 and especially the last low at $1.3594 keeps the developing pattern intact. Under the $1.3594 low, though, will make the main support at $1.3548 look vulnerable. If that were eliminated then the bears will likely turn their attention to the $1.3360 bottom. On the upside, clearing $1.3684 targets firstly the $1.3723 Fibonacci level but the possible pattern's implied reach is $1.3800."
USD/JPY: "The bears heavily hit 114.00 yen, which held. Prices then proceeded to pop higher but so far no significant rise has occurred. However, holding above the new though minor support at 115.15 will likely tempt buyers to take out the 117.14
to 117.70. On the downside, slipping under 115.15 will be the signal that the bears are getting ready to ram the 114.00 support."
GBP/USD: "The last decline held above the $1.9935 support and a possible ascending triangle is building. This makes it look as if an up leg is missing; meaning prices should pierce the $2.0200 resistance and head up to $2.0270. Once reached, selling should start again and drive levels under $1.9935 and on to $1.9744 and as low as $1.9653. The pattern remains valid as long as $2.0045 can hold as support. If not,
then the bears will turn their attention to the main support at $1.9935. It would look vulnerable and its elimination will likely initiate a fall to $1.9653."
AUD/USD: "Prices have started heading higher again after some slight support was established at $0.8052. Holding above it should see levels head up to a Fibonacci level at $0.8420, where selling will likely start again. On the downside, slipping under $0.8052 calls for a fall to $0.7893 and potentially as far as $0.7676.
COMMERZBANK CORPORATES & MARKETS
EUR/USD: "EUR/USD has failed to clear the $1.3680 resistance for 5 trading days now, but neither has it broken lower. The market remains corrective and we remain unable to rule out further upside scope towards $1.3735, 78.6 percent retracement, while the market holds over near term support at $1.3525. Ideally we would like to see failure shortly (favoured) and a slide below $1.3525 should be enough to refocus our attention onto the $1.3370/60 supports (recent low, 18 month uptrend and the 200 daily moving average). The $1.3735 level is regarded as the last defence for $1.3850, then $1.3930 the 14 month resistance line.
USD/JPY: "USD/JPY remains immediately offered while the short term chart is dominated by the downtrend at 116.51 yen. Overhead resistance extends to 117.70 (this zone represents the 50 percent retracement of the move lower seen recently, the 100 week moving average) and only a recovery above here would negate the current downside risk and suggest recovery (not favored). Loss of interim support at 14.00/113.70 should reinforce our bearish view and refocus attention on to the 111.60 recent low. Below 111.60 will signal further losses to 110.15 then 109.00/108.75 the 2006 low."
USD/CHF is attempting to erode minor resistance at 1.2055 francs we suspect it is neutralising near term as the market attempts to find a new base at 1.1960/00.
With technical indicators still neutral to negative at best it is likely to struggle on attempts higher - overhead resistance lies at 1.2101 (55 dma) and then 1.2200/20 (200 daily moving average, Fibo and recent high). We look for dips to remain well supported in the 1.1960, 1.1900 region and would maintain a near term poilicy of attempting to buy these dips.
GBP/USD continues to hold near term upside corrective potential to extend gains towards $2.0270 (61.8 percent retracement of the last leg down), immediate pressure remains on the topside while above $1.9920. We view the upside as limited however as we note that technical studies remain neutral to negative. Interim support lies at $1.9920 and failure here is needed to suggest upside pressure was waning causing our attention to revert to the major support at $1.9750/1.9650 (15 month uptrend, 200 dma and recent low.
EUR/JPY: "While EUR/JPY consolidates below the 159.60/75 yen pivot, our bearish outlook remains fully entrenched. We look for the market to come under pressure shortly and our focus remains on interim support that lies at 153.40/00. Failure here
(favoured) will retarget the 150.00/149.25 low. Longer term, the recent sell off reached a major support/target area 150.15/149.75, this represents the 23.6 percent retracement of the entire rally from the 2000 low to the 2007 peak and the 7 year uptrend. The market saw a minor breach of this level, but this was not sustained. Failure at 149.50/25 would be significant (favoured) and target 141.00."
Finotec Analysis Team
31 August 2007
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