Forex Market Commentary for October 3, 2007 by Cornelius LucaGFT Daily Market Commentary
The oversold dollar recovered across the board on Tuesday despite weak secondary US housing data. This means some profit taking hit and should continue to ht the carry trades and the standard yen crosses. The US non-manufacturing ISM is due today.
The euro fell for the second day on Tuesday and this slide, combined with Monday’s, was aggressive enough to form a bearish reversal. The pair is overbought enough that a further slide to 1.4000 would not be exaggerated.
Initial support is at 1.4115. If this Fibonacci retracement level gives way, look for a further move to 1.4065. Below 1.4000, distant support looms at 1.3925.
Immediate resistance looms at 1.4195. The next level is at 1.42.55. Above the pivotal high at 1.4281 there is resistance at 1.4310 and at 1.4430.
Oscillators are mixed.
Dollar/yen consolidated in a fairly tight range on Tuesday and got stuck in a double inside range. More information is needed for a move in this pair, but the core is in the overbought yen crosses. Thus, dollar/yen’s risk is on the downside.
The immediate resistance level is 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 115.50 from another 50-point pivot, which targets 115.00 and 116.00. Distant support is at 114.20 from another 50-point pivot that targets 113.70 and 114.70.
Oscillators are mixed.
Sterling/dollar fell on Tuesday as well, but two days of weakness didn’t reduce its gains between September 18 and October 1 by even 23.6%. The pair is overbought, but sell it only on a stop.
Immediate support is at 2.0370. Next level comes at 2.0350. Strong support is at 2.0270. Distant support is at 2.0190.
Initial resistance comes at 2.0436. Above the pivotal high of 2.0493 there is distant resistance in place at 2.0570.
Oscillators are rising.
Dollar/Swiss formed a potential bullish reversal on Tuesday, and since it remains oversold, the risk remains on the upside.
Above 1.1780 there is resistance at 1.1825. Next levels at 1.1890 and 1.1924 and a break above these levels means the pair is no longer oversold. Distant resistance is pegged at 1.2040.
Initial support comes at 1.1690. Below the pivotal low at 1.1619 there is a distant support level at 1.1570.
Oscillators are declining.