Forex Market Commentary for September 26, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar tumbled on Tuesday on news that the Conference Board’s index of confidence fell to 99.8 in September from an upwardly revised 105.6 in August and that the existing homes sales fell. But its decline was not uniform, as the pound was weak. The dollar remains oversold, but hold on to short positions and buy back only on a stop-loss basis.
Euro/dollar
The euro/dollar rallied to yet another 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 1.4153, strong resistance is seen only at 1.4260. Next resistance is pegged at 1.4305.
Initial support is at 1.4087. 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 recouped early losses after failing to break out of an inside range. Long euro/yen and carry trades remain favored.
Strong 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 recouped most of its losses after sinking on news that were very few assets left in UK’s deposit protection scheme to cover banking losses. Choppy and directionless trading should continue.
Immediate support is seen at 2.0150. A break below the 2.0055 level would signal a retest of the 2.0000 mark.
Above 2.0230, strong resistance remains at 2.0280. If this level gives way, look for a test of the pivotal high at 2.0332.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Mixed with upside bias
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss collapsed to a new 2 ½-year low of 1.1638 on Tuesday. The pair is severely oversold, but hold short positions and buy only a stop loss.
Below 1.1638, there is some support at 1.1610. Next level is 1.1570. Distant support follows at 1.1495.
Initial resistance is at 1.1715. Strong resistance follows at 1.1770. This level is followed by 1.1850. Distant resistance is at 1.1935.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish