Forex Market Commentary for December 19, 2007 by Cornelius LucaGFT Daily Market Commentary
Monday saw the expected profit taking in dollars and I wouldn’t be surprised if Tuesday will see more of the same. Tuesday will see the release of the housing starts and building permits report for November. With the housing sector in turmoil, the report surely is important.
Euro/dollar
Euro/dollar sank to a new low for the downtrend early Monday but ended the day basically unchanged. There may be a head-and-shoulders formation targeting 1.4085, but the pair is oversold in the short term so the next immediate move should be up.
Initial resistance is seen at 1.4490. The next level is 1.4525. Above 1.4635, strong resistance is seen at 1.4750.
Immediate support is at 1.4354. A break below this Fibonacci retracement level would suggest a test of 1.4290. Below 1.4250, euro/dollar has good support at 1.4165.
Oscillators are declining.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen made a mild retracement on Monday after nailing a five week-high on Friday and more strength is likely in the medium term. A close above 114.30 is needed to warrant medium-term strength. Keep in mind that there is a bullish flag that targets the 114.25 area and an inversed head-and-shoulders pattern that targets 115.10.
Initial support now comes from a 50-point pivot at 112.90 that targets 113.40 and 112.40. The next level is at 111.60 from a 50-point pivot that targets 112.10 and 111.10.
Immediate resistance is 113.45. Strong resistance follows at 114.20. The next level is 115.00.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar reversed from a marginally new 11-week low on Monday and the downside remains favored in the medium term. A medium-term bearish flag targets 1.9650.
Initial resistance is at 2.0285. This is followed by 2.0374.
Immediate support is now seen at 2.0185. This is followed by 2.0100. Next strong level follows at 2.0030.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss fell from a new five-week high on Monday, but its mild correction was not nearly sufficient to put a dent in its uptrend. A close above the 1.1610 area is needed to signal further strength.
Initial resistance remains at 1.1610. Above it, resistance comes at 1.1710 and 1.1750.
Immediate support is now seen at 1.1450. Below 1.1395, support is pegged at 1.1350.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish