Forex Market Commentary for October 25, 2007 by Cornelius LucaGFT Daily Market Commentary
Despite choppy trading amid catastrophic Merrill Lynch losses and very weak US housing, the dollar ended flat versus the European currencies and down against the yen. Word in the street is that the Fed will cut rates either next week or even before, and this supported the sliding stock indices. Expect further choppy trading today with a negative bias on the dollar.
Euro/dollar
Euro/dollar traded within Tuesday’s range, closing virtually unchanged, and remained stuck in an inside range. Expect choppy trading with a bullish bias.
Strong resistance is still seen at 1.4300. Above 1.4355, strong resistance is seen at 1.4395.
Initial support is at 1.4210. 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 with bullish bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell on Tuesday amid some sales in the yen crosses. But this is not a dramatic process yet; so sideways to lower trading is likely.
Initial support is at 113.85. Below 113.25 there is strong support is at 112.90 from a 50-point pivot that targets 113.40 and 112.40.
Immediate resistance is at 114.60. Above 115.05 there still is strong resistance at 115.50 from another 50-point pivot, which targets 115.00 and 116.00.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar encountered choppy trading, but when the dust settled it closed virtually unchanged on Wednesday and remained stuck in an inside range. Sideways trading is likely.
Initial resistance is still in place at 2.0550. This is followed by 2.0600. Then there is a distant pivotal high at 2.0654.
Immediate support is now seen at 2.0435. Below 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
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Despite choppy trading on Wednesday, dollar/Swiss closed marginally lower and remained in an inside range. The immediate bias is mixed to slightly negative.
Immediate support remains at 1.1703. This is followed by 1.1675. Below 1.1600, there is distant support at 1.1495.
Initial resistance is at 1.1765. 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 to slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish