Forex Market Commentary for February 1, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar encountered choppy trading and closed little changed on Thursday. With the overdone reaction to the expected Fed rate cut out of the way, brace yourselves for another shock from the non-farm payrolls. The ADP report was stellar, while the weekly jobless reading was abysmal, and this adds to the unknown. Keep your gunpowder dry until after the report.
Euro/dollar
Euro/dollar slipped from its new third highest level to close flat on Thursday. Choppy to lower trading is now likely through early Friday, and then take your cues from the US jobless data.
Immediate support is still seen at 1.4800. The next level is 1.4755. Only a break below 1.4710 would signal a more sustained decline and then 1.4640 could be revisited.
Initial resistance comes at 1.4870. Above this level, 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 recovered from an eight-day low to close little changed on Thursday. Again, the upside looks guardedly attractive for a quick trade.
Immediate resistance is at 106.80. The next good level is 107.30. Above it, strong resistance remains at 107.95 from a 50-point pivot that targets 107.45 and 108.45.
Initial support comes at 106.00. 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 traded sideways on Thursday, as my concerns that the apparent bearish reversal formation was not powerful were confirmed. The risk remains on the downside, but the US report is key.
Immediate support is at 1.9800. Below 1.9766, 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.
Initial resistance is at 1.9935. This is followed by 1.9960. Distant resistance is now seen at 2.0034.
Oscillators are rising.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss recovered from a new record low, which matched my support at 1.0760, and closed virtually unchanged on Thursday. The pair remains oversold, so some brief pullback is likely.
Initial resistance comes at 1.0885. The next levels are 1.0945 and 1.0990. Distant resistance is now seen at 1.1135.
Immediate support comes at 1.0800. This is followed by 1.0760. Distant support lies at 1.0605.
Oscillators are declining.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish