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TAURUS COMMODITIES
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(December 5, 1997) CURRENCIES: BRITISH POUND–Prices are at a critical juncture now with the drop to about a 50% retracement from last month's highs to the pivot point range at 150. It is unlikely we will see sell signals soon, mathematically, but if the decline in prices accelerates, we could see a sell around the 163 level basis December.
DEUTSCHEMARK–Waiting for new signals here too as prices approach late October low support level at 56.00. If that level holds, then we should see another run up in prices; if not, then a further decline to 54.00 is probable. With German analysts now believing there is less likelihood of an increase in German interest rates, the 54.00 level looks likely.
JAPANESE YEN–The yen continues, year after year, to be one of our top performers, and the current short looks like no exception. Some traders continue to fear intervention by the Bank of Japan to support the yen, but specialists believe it is unlikely to happen given the huge amounts of money that would be needed for anything beyond a quick fix.
SWISS FRANC–As with everything but the yen, we are waiting for new signals here as it appears increasingly unlikely the 70-cent level will support the current decline. Instead, it seems far more probable that prices will continue on down to at least the 67.50 level at the October lows or even the summer lows back at about 66 cents.
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