DEUTSCHEMARK/DOLLAR: DEUTSCHEMARK/YEN: STERLING/DEUTSCHEMARK:
STERLING/SWISS FRANC: DEUTSCHEMARK/SWISS FRANC: CANADIAN DOLLAR:

The dollar was higher across the board today with the gains most impressive versus the yen. Japanese officials decided to talk the dollar higher and decrease trade tensions. It worked! But the shorts got hurt. PPI out Friday, but unless it is much stronger than expected it should not interrupt the dollar's rally. More likely the number will be better than expected which should give the dollar and bonds another boost.

The dollar also put in an impressive performance today versus the DMK as more important resistance was overcome. This makes a further rally likely as the dollar should be able to test last Friday's highs. The dollar was just barely higher versus the SWF as it is still lagging.

DEUTSCHEMARK/DOLLAR: The hourly P&F chart shows both the reversal last week and the strong rally this week. Next resistance at 1.7330-50 and then at 1.7380-7420. Initial support at 1.7280 with further at 1.7230-50. A drop back below the 1.7180-7200 will be a short-term negative. The daily studies have turned up and are slightly positive. They are still below the recent highs. Summary--Traders go 25% long at 1.7236-78, stop at 1.7187. JUNE DEUTSCHEMARK: No position.

DEUTSCHEMARK/YEN: The cross appears to have bottomed as it reached the 66.70 level before the rally ran out of steam. The daily studies suggest that a short-term bottom is likely in place. Go 25% long at 65.12-48, stop at 64.47.

The dollar's rebound was impressive Thursday as the 115.75 level was hit before the dollar reversed. There is further resistance at 116-116.50 with the 38% retracement resistance in the 117 area. Initial support now at 113.50-80 with stronger in the 112.80-113.20 area. The RSI has moved further above its MAs but needs to overcome the downtrend to confirm the positive divergence.

Summary--Traders go 25% long at 113.37-77, stop at 112.77. JUNE JAPANESE YEN: Took profits on longs near the highs. Will look for an entry point on the short side of the September contract. STERLING/YEN: The STG/yen moved above the 188 level which cleared out most of the stops. The rally has been trying enough to complete a short-term bottom. Traders were 25% short at 190.44-88, stopped out at 185.23. Traders go 25% long at 184.40-90, stop at 183.77. SWISS FRANC/YEN: The cross is still holding above the 79 level with next major resistance at 80-81. First good support at 78-78.40. We will look for a setback to buy.

The cable did bounce from the 1.6300 level in European trading but then turned lower in NY to close weak. Support still at 1.6280-6300 and stronger in the 1.6230-50 area. The resistance is becoming stronger in the 1.6350-80 area with more important above 1.6400. Major resistance at 1.6450-80. No position.

STERLING/DEUTSCHEMARK: The cross has pushed above the 2.8200 level which is impressive. More important resistance in the 2.8300-30 area. A breakout above this level will project a rally to the 2.85 area. Was 25% short at 2.7920-50 and 25% at 2.8010-70, stopped at 2.8230.

STERLING/SWISS FRANC: The rally here has been much less impressive as the 2.3600 level has not been overcome. No recommendation.

The dollar was flat for most of the day but then rallied late to close near the highs and at resistance in the 1.4430-50 area. There is still more important resistance in the 1.4480-4500 area. Initial support now at 1.4380-4400 with stronger in the 1.4300-30. Traders were 25% short at 1.4372-4400, stopped out at 1.4433. Traders go 25% long at 1.4366-96, stop at 1.4317.

DEUTSCHEMARK/SWISS FRANC: The cross dropped sharply today as the support in the .8350 area was broken. Next strong support at .8300- 20. Resistance strong in the .8380-8400 area. Should be 25% long at .8377-8404, stop at .8337.

CANADIAN DOLLAR: The dollar broke sharply to the downside in early NY trading as the stronger support at 1.3800-30 was reached. Next major support in the 1.3750-3800 area. Strong resistance now in the 1.3850 area.

Summary--Should be 25% long at 1.3747-64, stop at 1.3757.

The bonds liked the weak retail sales number as they surged above the resistance at 11028-111 and closed sharply higher. This confirmed the buy signals from the daily studies. Though many of the daily studies are overbought, we see the potential for a further rally as long as the PPI does not hold any surprises. Next major targets in the 11124-112 area.

Summary--Traders are 25% long at 11016-26, stop at 11010. U.S. STOCK MARKET: The stock market was very impressive today with the Dow surging well above the 7700 level. The S&P futures have already reached the measured targets in the 885 area so 900 is not impossible.

June 13, 1997
Thomas E. Aspray
Aspray Parsons & McClintock
Asset Management Corporation
P.O. Box 2141, Spokane, Washington

Consensus National Futures and Financial On Line Index
Technical Corner Index

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