Forex Market Commentary for September 27, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar recovered versus the majors on Wednesday in an asymmetrical move and the weakness in yen vaulted the yen crosses. The dollar remains oversold, but buy it only on a stop-loss basis. Be careful of the US new house sales report.
Euro/dollar
The euro/dollar slipped from another new all-time high the day on Wednesday but closed little changed. The overbought pair should see some more weakness on profit taking. Again, sell only on a stop loss basis.
Initial support is at 1.4060. Below 1.4025, euro/dollar still has support at 1.3980. The next level is 1.3895.
Above 1.4162, strong resistance is seen only at 1.4260. Next resistance is pegged at 1.4305.
Oscillators are rising.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied on Wednesday but failed again to break out of an inside range. Long euro/yen and carry trades remain favored, but today should see choppy trading.
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.
Below 115.00, support 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
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar made a choppy decline on Wednesday but got stuck in an inside range. Choppy and directionless trading should continue.
Immediate support is seen at 2.0090. 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 recovered on Wednesday after collapsing a day earlier to a 2 ½-year low of 1.1638. The pair remains severely oversold, but buy it only on a stop loss basis.
Initial resistance is at 1.1745. Strong resistance follows at 1.1770. This level is followed by 1.1850. Distant resistance is at 1.1935.
Immediate support is at 1.1665. Below 1.1638, there is some support at 1.1610. Next level is 1.1570. Distant support follows at 1.1495.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish