Forex Market Commentary for November 7, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar resumed its expected slide and tanked versus both the European and the commodity currencies. Speculation that China’s plans to diversify its foreign exchange reserves by selling US assets accelerated the dollar slide. Now that the dollar ended its pause within the downtrend, it should encounter further weakness. No one in Washington cares about propping up the buck, so why should we?
Euro/dollar
Euro/dollar rallied to a new lifetime high and the upmove should continue.
Above 1.4705, resistance is now seen at 1.4755. Above it, distant resistance is seen at 1.4890.
Initial support is at 1.4610. Below 1.4545, euro/dollar has 1.4490. Distant support comes at 1.4415, but don’t expect to see this level anytime soon.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen edged higher on Tuesday but fell in Asia. The pair got stuck in an inside range. Again, expect mixed trading to continue.
Initial support comes at 114.20 from a 50-point pivot that targets 113.70 and 114.70. Below 113.50, strong support is at 112.90 from a 50-point pivot that targets 113.40 and 112.40.
Immediate resistance is at 114.70. Above 115.05 there is strong resistance at 115.50 from another 50-point pivot, which targets 115.00 and 116.00.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar surged to a new high for the uptrend, as expected. More strength is likely.
Initial resistance is at 2.0950. The next level is 2.1025. Above 2.1065 there is distant resistance at 2.1220.
Immediate support is seen at 2.0860. This is followed by 2.0770 and 2.0740. Next level is at 2.0685. Distant support is pegged at 2.0550, but the odds of reaching it are extremely remote.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss fell sharply to a new low for the downtrend. Hold short positions in this oversold pair until there is a confirmed bottom.
Below 1.1350, support is seen at 1.1310. The next support comes at 1.1240. Distant support is at 1.1100.
Initial resistance is seen at 1.1410. The next level is 1.1520. This is followed by 1.1590. Distant resistance is at 1.1655.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish