GFT Daily Market Commentary

[GFTforex]

Forex Market Commentary for September 10, 2008 by Cornelius LucaGFT Daily Market Commentary


Despite the massive sell-off in the US equity indices, oil & co. and carry trades, the European currencies ended little changed on Tuesday, after giving up early gains. Only dollar/yen tumbled to close at the lowest level since July 21. Depending on the news on Lehman, the catalyst of the equity slide, the dollar should see the same pattern on Wednesday as well. The outlook remains positive on dollar/Europe and slightly bearish in dollar/yen. No US reports are due on Wednesday.

Euro/dollar


Euro/dollar consolidated and closed virtually unchanged after cutting a new low for the downtrend on Tuesday. My model remains short. The immediate outlook is only marginally positive, while the medium-term outlook is negative.

Initial resistance remains at 1.4157. The next cap is between 1.4197 and 1.4207. If this strong area gives way, the pair is in for an aggressive recovery toward 1.4295. Distant resistance is at 1.4390.

Immediate support is at 1.4047. Below 1.3835, distant support is at 1.3695.

Oscillators are declining.


NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed


Dollar/yen


Dollar/yen fell sharply amid a new wave of sales of yen crosses. Following a brief recovery, the sell-off should resume. My model remains short.

Above 107.22, resistance is at 107.95 from a 50-point pivot, which targets 107.45 and 108.45. Above 108.70, resistance remains at 109.15 from another 50-point pivot, which targets 109.65 and 108.65. Distant resistance is at 110.35 from a 50-point pivot, which targets 109.85 and 110.85.

Initial support is at 106.75 from a 50-point pivot, which targets 106.25 and 107.25. A pivot low is at 105.53.

Oscillators are declining.


NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed


Sterling/dollar


Sterling/dollar consolidated in an inside range on Tuesday after failing to mount a recovery in New York. My model remains short. The medium term is bearish, but the short-term outlook remains mixed.

Initial resistance is at 1.7706. This is followed by 1.7737 from a Fibonacci retracement level. Above the strong pivot at 1.7975, distant resistance remains at 1.8100.

Immediate support is at 1.7505. Below the pivot low at 1.7471, distant support remains at 1.7315.

Oscillators are falling.


NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish


Dollar/Swiss franc


Dollar/Swiss slipped in an inside range on Tuesday after reaching the highest level since the end of last year a day before. My model remains long. Following some corrective decline, the uptrend should resume.

Immediate support is at 1.1214. This is followed by 1.1140. Distant support is at 1.1100.

Initial resistance remains at 1.1371. Above 1.1466, a pivot high remains at 1.1605.

Oscillators are rising.


NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish