Forex Market Commentary for March 12, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar recovered sharply on Tuesday after the Federal Reserve led a globally coordinated measure to add liquidity into the financial system, and this alleviated fears about a deepening credit crisis and recession. The Fed will now allow dealers to use agency debt and mortgaged-backed securities as collateral on the new facility and also lent up to $200 billion of Treasury securities to primary dealers.
Euro/dollar
Euro/dollar gave up gains from a new record high. I still like long positions in line with my model, long since February 14 – only a break below 1.5230 would change that. The pair is certainly overbought, so short-term weakness is possible.
Immediate support is at 1.5285. The next level is at 1.5230. Below 1.5175, there is further support at 1.5020.
Initial resistance is at 1.5405. Above the pivot top at 1.5493, resistance remains at 1.5575. The next level is at 1.5600.
Oscillators are rising.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen made a bullish reversal and this prompted my system to reverse short positions since February 26. More strength is likely.
Immediate resistance is now seen at 103.50. Above 104.20, distant resistance remains at 104.50 from a 50-point pivot that targets 104.00 and 105.00.
Initial support is at 102.30 from a 50-point pivot, which targets 101.80 and 102.80. The next level is 101.43.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar spiked lower but my model remains long since February 2. Only a break below 1.9944 would turn it bearish.
Immediate support is now seen at 1.9995. Below 1.9945, the next level is seen at 1.9885.
Initial resistance remains at 2.0135. A break above 2.0219 would signal another further rally to 2.0330.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Dollar/Swiss franc
The oversold dollar/Swiss reversed aggressively and this prompted my model to reverse short positions held since February 21. The medium-term outlook remains bearish but a further bounce wouldn’t surprise.
Initial resistance now comes at 1.0350. Above 1.0380, the next level is 1.0505.
Immediate support remains at 1.0255. Below 1.0135, support is still pegged at 1.0060.
Oscillators are declining.
NEAR-TERM: Bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
[B]See Also[/B]
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