INSIGHT--Dollar lacks drive, may revisit lows
NEW YORK, Sept 18 (Reuters) - A lackluster dollar is likely to revisit its recent lows versus both the yen and the mark in the week ahead, analysts predicted on Friday.
Dollar/yen topped out at 135.77 on Wednesday, abruptly ending a climb started at 128.90 on September 11.
''Dollar/yen failed near 136 on Wednesday, retreating in a rather aggressive way,'' said Martin Autotte, technical analyst at CIBC Wood Gundy. ''Dollar/yen is recovering a bit, but I expect more weakness next week and a retest of recent lows.''
Dollar/yen closed at 132.65/75 yen versus 132.05/15 at the open and vs. 132.05/08 at the close on Thursday.
With a higher close, dollar/yen preserved two strong support levels that technical analysts at MCM CurrencyWatch put at 131.70 yen and 131.00 yen.
However, they also expected the corrective bounce to be capped in the 133.40- to 134.00-yen area, with a fresh downward drift likely to emerge there.
Autotte shared that sentiment.
''My objective in a new downward trend is at 127.80 yen, which would be the final downleg in an Elliott-Wave move started at 147.63,'' said Autotte, referring to the high on August 11.
But Autotte's longer-term dollar/yen outlook was upbeat, as he expected a healthy rebound once the low objective is met.
''On the way up, dollar/yen must recapture 133.65 as the first significant chart point, and then, we could go to 138-140 next month.''
Dollar/mark displayed even less stamina than dollar/yen, ending the session where it left on Thursday, at around 1.6950. On the positive side, dollar/mark did not give up any ground after a softer open at 1.6932/35 followed by a dip to 1.6860.
''Dollar/mark has been in a congestive pattern all week, with well-defined top and bottom,'' Autotte said.
Autotte pointed out dollar/mark tested three times the 1.70 area, therefore now an important top.
MCM CurrencyWatch chartists agreed with that view, mainly with 1.6980 representing an important level in a falling resistance trendline.
''It's much of the same scenario on the downside,'' Autotte added, noting multiple recent tests of the 1.68-mark area.
Meanwhile, dollar/Swiss gave some mixed signals, closing at 1.3935, just off the day's high at 1.3965, but not strong enough to recapture the 1.40 level lost on Wednesday. |
