Forex Market Commentary for October 17, 2008 by Cornelius LucaGFT Daily Market Commentary
Volatility continued on Thursday and the VIX hit a record high. The US data remained very weak, even more than expected. When the dust settled, the US stock indices rallied and oil prices fell further. The European currencies should advance today, while the yen should decline. Don’t expect any solace from the US housing and University of Michigan reports.
Euro/dollar
The euro/dollar recouped early losses and my model remains short. The initial bias turned only slightly bullish, as the medium-term outlook remains bearish.
Initial resistance remains at 1.3515. This is still followed by 1.3615 and 1.3765.
Immediate support is at 1.3375. 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 early losses to close higher on Thursday and my model went long now. Choppy trading will persists, but the initial bias is up. The medium-term outlook remains bearish.
Above 101.75, resistance is at 102.30 from a 50-point pivot, which targets 101.80 and 102.80. A pivot high lies at 103.06.
Immediate support comes at 101.25 from another 50-point pivot, which targets 100.75 and 101.75. The next level is 100.25 from a 50-point pivot, which targets 99.75 and 100.75.
Oscillators are bullish.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar reversed from a three-day low, but my model remains short. The upside is favored on Friday, but the medium-term outlook remains bearish.
Initial resistance is at 1.7430. Good resistance follows at 1.7505. Distant resistance remains at 1.7630.
Immediate support is now seen at 1.7250. The next level is 1.7140. Distant support is at 1.6790.
Oscillators are bullish.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss fell on Thursday from a new high for the uptrend to give up most of its early gains and my model remains short. The medium-term risk remains on the upside, but some weakness is likely today.
Immediate support is still seen at 1.1310. The next level is 1.1240. Below 1.1140, support is seen at 1.1055.
Initial resistance remains at 1.1390. The next levels are 1.1412, 1.1490 and 1.1605h.
Oscillators are mixed.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish