Forex Market Commentary for November 27, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar sank aggressively against the yen while rising versus the antipodeans, and this means that the carry trades couldn’t quite make it and are going instead through more long liquidation. The US currency should remain under general selling pressure against the yen and the European currencies.
Euro/dollar
Euro/dollar made a mild upmove on Monday but remained in an inside range. Again, it should make only a pullback before the next move up.
Above 1.4940, strong resistance is seen at 1.4966. This is followed by 1.5000. Distant resistance is now pegged at 1.5130.
Initial support is at 1.4800. Below 1.4777, 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 sank to a new 2 ½-low on Monday. If the long liquidation of carry trades is continuing, the pair should remain under pressure. But an initial bounce may not be surprising for the oversold pair.
Initial support comes at 106.90.
Immediate resistance is at 107.95 from another 50-point pivot; targets 107.45 and 108.45. This is followed by 108.60. Strong resistance follows at 109.15 from another 50-point pivot that targets 109.65 and 108.65.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar climbed up on Monday but within an inside range. The problem here is that its strength reflected that of the other the European currencies, but as high-yielding currency was not sold off like the antipodean currencies. Mixed to higher trading is likely.
Above 2.0764, resistance remains at 2.0795. Above it there is resistance at 2.0840. Distant resistance looms at 2.0980.
Immediate support is seen at 2.0660. This is followed by 2.0590. Below 2.0520, the next floors are at 2.0455 and eventually at 2.0315.
Oscillators are rising.
NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss remains weak still after closing on Monday at its lowest level since currencies were allowed to float freely. It is very oversold, but buy it back only on a confirmation.
Below 1.0960, support remains pegged at the pivotal low of 1.0892. Distant support follows at 1.0805.
Initial resistance is at 1.1070. The next level is 1.1100. This is followed by 1.1175 and 1.1285.
Oscillators are declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish