Forex Market Commentary for September 12, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar followed divergent paths on Tuesday, when it sank versus the euro and the pound, and it rallied against the yen and Swiss franc. Fed Chairman Bernanke didn’t shed any light on interest rates and the US trade data failed to attract much attention. No US data is scheduled for release today.
Euro/dollar
The euro/dollar rallied on Tuesday for the fifth consecutive day and came very close to its all-time high. The failure to surpass suggests a corrective decline despite surpassing the 1.3800 area.
Below 1.3795, euro/dollar now has support at 1.3730. This is followed by 1.3635. Only a break below 1.3600 would signal the resumption of the downmove.
Initial resistance remains at 1.3853 from a pivotal high. Next resistance is pegged at 1.3935.
Oscillators are rising.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen struggled higher on Tuesday. Following another bounce, the pair should slip. Key level is at 114.20 from another 50-point pivot that targets 113.70 and 114.70.
Immediate resistance is seen at 114.50. Above 114.70 there is good resistance at 115.50.
Initial support is at 113.70. Strong support follows 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.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied to a marginally new one-month high of 2.0340 on Monday as it recovered 61.8% of the downmove between July 23 and August 17. It should now pull back on profit taking before any further strength can be seen.
Immediate support is seen at 2.0250. This is followed by 2.0210. A break below the 2.0145 level would signal a further slide to 2.0000.
Above 2.0340, strong resistance follows at 2.0400. If the resistance at 2.0470 gives way, look for distant resistance at 2.0530.
Oscillators are rising.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
The oversold dollar/Swiss reversed losses from a five-week low of 1.1838 on Tuesday to form a tentative bullish reversal formation. Further confirmation is needed.
Above 1.1920, resistance is at 1.1970. This is followed by 1.2025. Distant resistance comes at 1.2115.
Below 1.1838, support is still seen at 1.1819. Next levels are 1.1788 and 1.1740 from a pivotal low.
Oscillators are bearish.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bearish