Forex Market Commentary for January 30, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar was all over the place on Tuesday, up against the franc and yen, and down versus the pound. Trading should remain choppy through Wednesday afternoon, when the Fed is supposed to cut rates. There is only downside risk for a cut of only 25 bps, and this would hurt the stock market. Don’t get heroic before the Fed shows its hand.
Euro/dollar
Euro/dollar went back to an inside range on Tuesday. Choppy to lower trading is likely for most of today.
Immediate support is still seen at 1.4730. The next level is 1.4710. Below 1.4640 there is further support at 1.4590. Distant support now comes at 1.4500.
Initial resistance comes at 1.4825. Above 1.4870 there are pivotal highs at 1.4990 and 1.4966.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen essentially consolidated on Tuesday as well, but had an upward bias. Mixed trading is likely today as well.
Immediate resistance is at 107.35. Above it, strong resistance remains at 107.95 from a 50-point pivot that targets 107.45 and 108.45. Distant resistance is at 109.65.
Good support remains at 106.35. Strong support follows at 105.50 from a 50-point pivot, which targets 115.00 and 116.00. Distant support lies at 104.25.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar rallied further on Tuesday to reach the highest level of the year. Choppy trading is likely here unless 1.9950 breaks. The risk is on the downside later in the day.
Initial resistance is at 1.9950. The next level is at 2.0034. Distant resistance is now seen at 2.0100.
Immediate support is at 1.9830. Below 1.9780, good support comes at 1.9720. Below 1.9680, there is further support at 1.9630. The next level is at 1.9430. Distant support is pegged at 1.9338.
Oscillators are rising.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss is trading one day up and one day down, and Tuesday was the up day. The pair spend two days in an inside range and the pressure is mounting. The pair remains oversold, so some more strength is likely here.
Initial resistance comes at 1.0990. Above 1.1030, distant resistance is now seen at 1.1135.
Immediate support comes at 1.0893. A pivot low is at 1.0840. A distant support follows at 1.0760.
Oscillators are mixed.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish