Forex Market Commentary for March 17, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar sank further the low-yielding euro, yen and Swissy, but rallied versus the high-yielding cable, Aussie and Kiwi on Friday. News that Bear Stearns is following Carlyle bond funds’ woes hurt as well. This pattern continued on Monday. On Tuesday, the FOMC meeting is expected to result in a rate cut of at least 75 basis points and probably 100 basis points. The dollar should see more pressure.
Euro/dollar
Euro/dollar registered its fifth consecutive week of gains on its way to a new record high. My model remains long since February 14, but I prefer to reduce long positions as the pair is very overbought.
Initial resistance is at 1.5770. Above 1.5850, resistance now comes at 1.5950.
Immediate support is at 1.5715. This followed by 1.5670. Below 1.5575, there is further support at 1.5535.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen closed below 100 on Friday and my system is short. It still looks bearish, but I like only small short positions because the pair is very oversold.
Initial support is at 97.70. The next support comes from a 50-point pivot at 97.30, and this targets 96.80 and 97.80. Below it, distant support is at 96.60.
Immediate resistance is now seen at 98.80. Key level is at 99.25 from a 50-point pivot, which targets 98.75 and 99.75. This is followed by 100.25 from a 50-point pivot, which targets 99.75 and 100.75. Then, there is the 50-point pivot at 101.25, which targets 100.75 and 101.75.
Oscillators are falling.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar formed a potential bearish reversal on Friday. Following this pullback, the upmove should resume.
Immediate support is now seen at 2.0130. This is followed by 2.0085. Below 2.0030, the next level follows at 1.9940.
Initial resistance now comes at 2.0235. This is followed by 2.0275. A break above 2.0397 would signal another further rally to 2.0525.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss suffered another loss on Friday and then early Monday on its way to a new record low last week and the medium-term trend remains bearish. My model was remains short. Dollar/Swiss franc is oversold here and a brief bounce early this week wouldn’t surprise. Again, the outlook remains negative in the medium term.
Immediate support is now seen at 0.9800. Below 0.9750, support is now pegged at 0.9625. Distant support is at 0.9450.
Initial resistance now comes at 0.9925. This is followed by 1.0045. The next level is 1.0090.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish