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ASPRAY'S GLOBAL TRADER
Dollar Stays Weak As Stronger Support is Hit Stocks And Bonds Are Higher
The markets are reported as of the close Thursday.
The dollar attempted to stabilize several times Thursday but each time the sellers took over. The lower close has brought the dollar to more important support versus the DMK and SWF as it is getting oversold. The daily studies are all negative and declining but are not trending lower yet. The intra-day analysis is quite oversold and we are still expecting a 1-2 day bounce over the next few days. So far just the potential for intervention has taken the dollar lower.
The dollar is still acting much weaker versus the yen as it has made further new lows early Friday. The lower daily starc bands are being tested which indicates the dollar is quite oversold.
DEUTSCHEMARK/DOLLAR: The dollar tried to hold the daily chart support at 1.7050 but this level has given way Friday as the dollar is testing 1.6980. Once below 1.6950, stronger support at 1.6850- 6900 area. Initial resistance at 1.7040-60 with stronger at 1.7100. Summary--It looks like chasing the short side a few days ago was not that bad an idea. We should get a better risk/reward selling opportunity in the next few days.
JUNE DEUTSCHEMARK: No position.
DEUTSCHEMARK/YEN: The cross has continued to drop and should now test the 71.80-7200 area. Our selling zone was not hit. No position.
SWISS FRANC/DOLLAR: The dollar has reached stronger support at 1.4350-80 with next important support at 1.4250. A rebound should fail in the 1.4450-4500 area. No position.
Dollar Selling Continues But No Intervention
The dollar dropped sharply to the 123.40 area in early European trading and then moved sideways for most of the New York session. The dollar's decline has resumed early Friday with the dollar dropping down to the 122.50 area. Next good support at 121.80-122. The daily chart shows that the lower starc band is now being tested. The daily studies are all negative with the APMosc now at <196>46. The ADX line has turned up but is not at trending levels. First resistance at 123 with more important now at 123.50-124. Summary--Our selling zone was not hit and will wait for a rally before selling.
JUNE JAPANESE YEN: No position.
STERLING/YEN: The STG/yen has broken the 200 level and could reach 196-197 over the near term.
SWISS FRANC/YEN: The support at 85.20 appears to be holding for now with next strong support in the 84.50-80 area. No current position.
CANADIAN DOLLAR: The dollar has continued to rally versus the CAN as the 1.3880 area has been reached. A move above the 1.3900 level does look likely before we get a 1-2 day setback.
Cable Stable But Crosses Drop
The cable rallied up to the 1.6300 level but then turned lower and closed just a bit higher for the day. The wide trading range 1.6150-6250 is still intact but the crosses have dropped sharply over the past few days, and are acting more negative. No position. JUNE T-BONDS: The bonds broke the 109 level but then rallied sharply. Still resistance at 110-11008 needs to be overcome to reaffirm the uptrend. A daily close below 109 should be enough to trigger a more serious decline. Traders are 25% short at 11007-10 stop at 11019.
U.S. STOCK MARKET: Stocks opened weak but the selling dried up quickly as they soon turned higher. Last hour selling took the market well off its highs but it still was higher on the day. No signs of a top as we expect further new all-time highs in the next few days with the OTC leading the way.
May 9, 1997
Thomas E. Aspray
Aspray Parsons & McClintock Asset Management Corporation
P.O. Box 2141,
Spokane, Washington
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