Forex Market Commentary for October 24, 2007 by Cornelius LucaGFT Daily Market Commentary
The FX markets are losing direction, with dollar giving back gains on Tuesday after making an unexpected bullish reversal versus the European currencies a day earlier. Expect further choppy trading today while traders seek new direction.
Euro/dollar
Euro/dollar recovered about half of Monday’s losses but was stuck in an inside range. A bearish engulfing pattern remains in place, but this is less powerful now. Following a brief recovery, the decline may resume.
Strong resistance is seen at 1.4300. Above 1.4355, strong resistance is seen at 1.4395.
Below 1.4170, euro/dollar now has support at 1.4125 and at 1.4085. Next level is 1.3975. Distant support is at 1.3855.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen marked time on Tuesday but some strength is likely because the carry trades seem to be back in fashion.
Above 115.05 there still is strong resistance at 115.50 from another 50-point pivot, which targets 115.00 and 116.00.
Initial support is at 113.55. Strong support is at 112.90 from a 50-point pivot that targets 113.40 and 112.40.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar recovered most of Monday’s losses despite soft UK economic data. Following another bounce, the slide may continue.
Initial resistance is at 2.0550. This is followed by 2.0600. Then there is a distant pivotal high at 2.0654.
Immediate support is seen at 2.0395. The next levels are 2.0330 and 2.0260. Distant support is from a Fibonacci retracement level at 2.0135.
Oscillators are mixed.
NEAR-TERM: Mixed t
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss slipped following Monday’s rally but remained in an inside range. The immediate bias is mixed.
Immediate support is at 1.1703. This is followed by 1.1675. Below 1.1600, there is distant support at 1.1495.
Initial resistance is at 1.1787. This is followed by 1.1812 from a Fibonacci retracement level. Above this level, distant resistance is at 1.1894.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish