Forex Market Commentary for November 1, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar fell further versus the European and The commodity currencies on Wednesday while rallying against the yen. The market generally ignored the (subject to revision) strong US GDP report but sold dollars after the Federal Reserve met the market expectations and cut its benchmark interest rate by 25 basis points to 4.5 percent and signaled reluctance to cut borrowing costs further. The dollar remains oversold versus the European currencies but, again, buy it only on a confirmation.
Euro/dollar
Euro/dollar rallied to another lifetime high. It is very overbought but hold on to long positions and sell it only on a confirmation.
Strong resistance is now seen at 1.4505. Above it, strong resistance is seen only at 1.4580. Distant resistance is at 1.4665.
Immediate support is at 1.4440. This is followed by 1.4380 and 1.4320. Below 1.4280, euro/dollar still has support at 1.4210.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen exploded higher on demand for yen crosses. Sideways to lower trading tough is now likely.
Immediate resistance now comes at 115.50 from another 50-point pivot, which targets 115.00 and 116.00. Further resistance is at 116.45.
Initial support is at 114.80. Below 114.25 there is strong but distant support is at 112.90 from a 50-point pivot that targets 113.40 and 112.40.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied to a new 26-year high on Wednesday. Some profit taking may be due for the overbought pair, but sell it only on a confirmation.
Initial resistance is now seen at 2.0865. This is followed by 2.0910. Then there is distant resistance at 2.1050.
Immediate support comes at 2.0755. Below 2.0655 there is support at 2.0550.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss fell further to a new 2 ½-year low. The immediate bias is mixed to slightly negative.
Immediate support is seen at 1.1545. Below it, there is support at 1.1495.
Initial resistance is at 1.1620. Above 1.1675, the next levels are 1.1715 and 1.1765. These levels are followed by 1.1812 from a Fibonacci retracement level.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish