Forex Market Commentary for November 21, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar suffered a big sell-off versus the European currencies The dollar suffered a big sell-off against the European currencies after the Fed warned that the housing crisis, tighter credit conditions and high energy prices will hurt the U.S. economic growth in 2008 to between 1.8% and 2.5%. This is down from the 2.5 -2.75% forecast in June. Thus, the Fed might have to cut lending rates again in December. After a mild pullback, the dollar should go under more pressure into Thanksgiving.
Euro/dollar
Euro/dollar surged to a new record after the Fed comments. It should make only a brief pullback before the next move up.
Strong resistance now emerged at 1.4925. This is followed by 1.5000. Distant resistance is now pegged at 1.5130.
Initial support is at 1.4750. The next floor is at 1.4700. This is followed by 1.4635 and 1.4560.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen has been trading one day up and one day down in the past six days, and this silly pattern continues, then Wednesday should be a down day… Mixed trading should continue for as long as the pivot at 109.15 remains in place.
So, strong support remains at 109.15 from another 50-point pivot that targets 109.65 and 108.65.
Above 109.65, strong resistance is at 110.35 from a 50-point pivot that targets 109.85 and 110.85. Distant resistance follows at 111.60 from a 50-point pivot, which targets 112.10 and 111.10.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar managed to rally away from 2.0525, which is 50% of the leg up between September 18 and November 9. Sideways to higher trading should be seen today’.
Above 2.0685, resistance remains at 2.0795. Above it there is resistance at 2.0840. Distant resistance looms at 2.0980.
Immediate support is now seen at 2.0590. Below 2.0520, the next floors are at 2.0455 and eventually at 2.0315.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss collapsed to a new low for the downtrend, and this oversold pair should edge further down today.
Immediate support is now seen at 1.1025. Below it, support is pegged at 1.0980. Distant support moved down to 1.0930.
Initial resistance is at 1.1110. The next levels are 1.1195 and 1.1260. Above 1.1335, there is resistance at 1.1400.
Oscillators are falling.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish