Forex Market Commentary for September 10, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar sank aggressively against the majors on Friday, especially versus the yen. The bias remains bearish for the dollar in the wake of the very weak non-farm payrolls report, but a mild and brief recovery is likely.
Euro/dollar
The euro/dollar rallied to a four-week high on Friday. It is probing a weak resistance line declining since July 24 in the 1.3800 area and a close above it is needed to warrant more strength.
So, above 1.3800, resistance is at 1.3853 from a pivotal high. Next resistance is pegged at 1.3935.
Below 1.3720, euro/dollar now has support at 1.3635. Only a break below 1.3600 would signal the resumption of the downmove.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen sank to a three-week low and coined its lowest close in about 14 months during the aggressive slide from Friday. This weakness should spillover to this week and probably beyond.
Initial support now comes at 112.90 from a 50-point pivot that targets 113.40 and 112.40. Next strong follows at 111.60 from another 50-point pivot, which targets 112.10 and 111.10.
Immediate resistance is seen at 114.20 from another 50-point pivot that targets 113.70 and 114.70.
Oscillators are declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied to a four-week high of 2.0322 on Friday. By now it recovered 61.8% of the downmove between July 23 and August 17. A close above 2.0322 is needed to confirm further strength for this high-yielding currency.
Above 2.0322, strong resistance follows at 2.0400. If the resistance at 2.0470 gives way, look for distant resistance at 2.0530.
Immediate support is seen at 2.0200. A break below the 2.0145 level would signal a further slide to 2.0000.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss sank to a four-week low and closed at the lowest level of the year on Friday. A close below 1.1917 would confirm further weakness.
Below 1.1917, supports are seen at 1.1860 and 1.1819. Next levels are 1.1788 and 1.1740 from a pivotal low.
Initial resistance is at 1.1920. This is followed by 1.2025.
Oscillators are bearish.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bearish