Forex Market Commentary for October 1, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar is opening flat after suffering a meltdown on the last day of the third quarter on technical trading (following a break lower in the dollar index), worries about the housing sector and further rate cuts. Again, the dollar remains oversold, but buy it only on a stop-loss basis. Watch out for the release of the ISM Manufacturing PMI report.
Euro/dollar
The euro/dollar rallied to yet another all-time high on Friday. It is even more overbought now, but hold long positions and sell only on a stop-loss order basis.
Above 1.4305, strong resistance is seen only at 1.4400. Distant resistance is at 1.4580.
Below 1.4200, euro/dollar now has support at 1.4140.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell on Friday but remained in an inside range. Long euro/yen and carry trades remain favored. Expect sideways trading today
The key resistance level is 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.
Strong support is at 114.20 from another 50-point pivot that targets 113.70 and 114.70.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar broke the top of a symmetrical triangle on its way to an over two-month high. Following a brief decline, the rally should continue.
Strong resistance comes at 2.0530. If this level gives way, look for a test of the pivotal high at 2.0654. Distant resistance is now perched at 2.0735.
Immediate support is seen at 2.0405. A break below the 2.0365 level would signal a retest of 2.0315.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss sank to a new 2 ½-year low of 1.1625 on Friday. This is the third consecutive week of heavy losses for the oversold currency pair. Hold short positions and buy only a stop loss basis.
Below 1.1585, there is support at 1.1495. Distant support is at 1.1410.
Initial resistance is at 1.1690. The next level is 1.1770 and this is followed by 1.1850.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish