Forex Market Commentary for October 13, 2008 by Cornelius LucaGFT Daily Market Commentary
The US stock markets failed an attempt to redress, the commodities remain under pressure and the adversity to risk is still annihilating the carry trades lower. The dollar reversed early losses on Friday and advanced across the board. The dollar should consolidate today amid holidays in Japan, US and Canada, but the bias is bearish against the European currencies and bullish versus the yen.
Euro/dollar
The euro/dollar fell to a 1 ½-year low last week amid general dollar strength despite struggling higher between Tuesday and Thursday. My model remains short, but the initial bias is bullish.
Initial resistance is seen at 1.3620. This is followed by 1.3705, 1.3785 and1.3845.
Immediate support is at 1.3550. The next level is 1.3460. Below 1.3261, support comes at 1.3040.
Oscillators are mixed.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/yen
Dollar/yen reversed from a seven-month low but my model remains short. The medium-term outlook is bearish, but the short term calls for further strength.
Good support is at 100.25 from a 50-point pivot, which targets 99.75 and 100.75. The next level is 99.25 from another 50-point pivot, which targets 98.75 and 99.75. The next level is 98.25 from a 50-point pivot, which targets 97.75 and 98.75.
Immediate resistance is at 101.25 from another 50-point pivot, which targets 100.75 and 101.75. The next level is 102.30 from a 50-point pivot, which targets 101.80 and 102.80.
Oscillators are bearish.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar recovered from a near-five year low and my model remains short. The downside remains favored in the medium term, but there is upside risk in the short term.
Initial resistance is at 1.7180. Good resistance follows at 1.7230 from a Fibonacci retracement level. Above the strong level at 1.7500, distant resistance is now seen at 1.7765.
Immediate support is at 1.7095. The next levels are 1.7020, 1.6920 and 1.6790.
Oscillators are bearish.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss reversed early losses and my model remains long. Once again, the risk remains on the upside, but a pause is due.
Immediate support is at 1.1240. The next level is 1.1220. Below 1.1140, support is seen at 1.1055.
Good resistance is pegged at 1.1360. The next levels are 1.1412 and 1.1605 from a pivot high.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish