Forex Market Commentary for December 8, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar gave back its early gains versus the GBP and CHF, fell against the EUR and consolidated on a higher note versus the yen. The pound recovered from a new low for its decline after the BoE met the market expectations and cut rates by 25 bps to 5.5%. The dollar should trade violently after the release of the non-farm payrolls at 8:30 EST but which way is anyone’s guess. The expectations are that a strong report means that the Fed will cut rates only by 25 bps on Tuesday, while a weak one suggests a 50-bp cut; so, start from here.
Euro/dollar
The euro/dollar bottomed on Thursday and then climbed up. The direction is now fuzzy, so wait for the non-farm payrolls.
Immediate resistance is still seen at 1.4665. Above 1.4720, strong resistance is seen at 1.4770.
Initial support is at 1.4585. A break below 1.4530 would suggest a test of 1.4445.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied marched higher, but the immediate outlook remains mixed.
Immediate resistance is now at 111.60 from a 50-point pivot that targets 112.10 and 111.10.
Initial support now comes at 111.10. Below 110.60 there is support at 110.35 from a 50-point pivot that targets 109.85 and 110.85111.00.109.30.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar bottomed at a new low for the downmove and recouped some of the losses after the telegraphed BoE rate cut. More Expect sideways trading before the surge in volatility on Friday morning.
Initial support remains at 2.0230. Below 2.0185, there is distant support at 2.0025.
Immediate resistance is still seen at 2.0365. The next cap is at 2.0410. Above 2.0492, resistance comes only at 2.0585.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss looked peaked early and the trimmed gains. Except quiet trading before the release of the US unemployment report.
Initial resistance is at 1.1350. Above 1.1400, there is resistance at 1.1525.
Immediate supports are at 1.1265 and 1.1230. The next level is 1.1110. Below 1.1060, support is pegged at 1.1025.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish