Forex Market Commentary for September 25, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar traded sideways versus the European currencies on Friday while dollar/yen edged lower in an inside range. While all eyes will be on this European cross and on shorting yen on the crosses, be on the lookout for the US data. The consumer confidence and the existing home sales reports can be market movers in this shaky financial environment.
Euro/dollar
The euro/dollar edged up to a new all-time high the day on Monday as well but closed unchanged. The overbought pair should see some pullback on profit taking before the next move higher. Again, sell only on a stop loss basis.
Above 1.4140, strong resistance is seen only at 1.4260. Next resistance is pegged at 1.4305.
Below 1.4050, euro/dollar still has support at 1.3980. The next level is 1.3895.
Oscillators are rising.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen is alternating up and down days and Monday was the day to go down. But the move was mild and the pair remained in an inside range. Long euro/yen and carry trades remain favored.
Immediate resistance is still seen at 115.50 from another 50-point pivot, which targets 115.00 and 116.00. The next big level is 116.85 from another 50-point pivot that target: 116.35 and 117.35.
Initial support now comes at 114.70. Strong support is at 114.20 from another 50-point pivot that targets 113.70 and 114.70.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar gave up gains from a 12-day high after failing to penetrate the top of a symmetrical triangle for too long. It still is the weakest of the European currencies and the downside is favored.
Immediate support is seen at 2.0160. A break below the 2.0055 level would signal a retest of the 2.0000 mark.
Strong resistance remains at 2.0280. If this level gives way, look for a test of the pivotal high at 2.0332.
Oscillators are rising.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Mixed with upside bias
LONG-TERM: Bullish
Dollar/Swiss franc
The oversold dollar/Swiss traded sideways and closed unchanged but remains soft after sinking to a 2 ½-year low of 1.1679 on Friday. The pair is severely oversold and the risk is on the upside. Still, hold short positions and buy only a stop loss.
Below 1.1679, there still is support at 1.1655. Next level is 1.1570. Distant support follows at 1.1495.
Initial resistance is at 1.1770. This level is followed by 1.1850. Distant resistance is at 1.1935.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bearish