GFT Daily Market CommentaryThe dollar stabilized after the House voted for the TARP and despite the horrible nonfarm payrolls. The credit markets remain frozen and the dollar is needed for funding out of Europe. The European horizon is darkening, so the euro should remain under pressure in the medium term. But the dollar is overbought in the short term, so a pause is due. The risk for the equities is on the downside.
Euro/dollar
Euro/dollar sank to a 14-month low. My model remains short and the medium term outlook is bearish, but in the short term, a bounce is likely.
Immediate support is 1.3615. Below 1.3465, distant support is at 1.3350.
Initial resistance is seen at 1.3705. This is followed by 1.3845.The next level is 1.3935. Above 1.3938, distant resistance is at 1.4200.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/yen
Dollar/yen encountered choppy trading, but closed flat on Friday. The short-term outlook remains bearish
Good support is seen at 104.10. This is followed by 103.54.
Immediate resistance is at 104.50 by a 50-point pivot, which targets 104.00 and 105.00. The next level remains at 105.60 from a 50-point pivot, which targets 105.10 and 106.10.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar reversed Thursday loses but my model remains short. While the medium term outlook remains bearish, the pair is heavily oversold and a mild bounce is likely.
Immediate support is at 1.7600. Below 1.7550, strong support now comes at 1.7448 from a pivot low.
Initial resistance is at 1.7840. Good resistance follows at 1.7950 from a Fibonacci retracement level. Above the strong level at 1.8060, distant resistance is at 1.8200.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss franc reversed Thursday’s gains, but my model remains long. The initial bias is bearish, as the pair remains overbought. The medium term outlook is bullish
Initial resistance remains from a pivot high at 1.1412. Above 1.1490, distant resistance is seen at 1.1580.
Immediate support is at 1.1290. The next level is 1.1220. Below 1.1190, support is now pegged at 1.1135. Distant support is at 1.1000.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish