Forex Market Commentary for December 21, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar rallied versus the European currencies on Thursday. The pound sank further below the $2 mark on news that the U.K.'s current-account deficit widened to a in the third quarter. Expect choppy trading on the last trading day before Christmas and during the triple witching hour.
Euro/dollar
Euro/dollar fell to a near two-month low on Thursday. There is a head-and-shoulders formation targeting 1.4085, and this weakness bodes well for it.
Immediate support remains at 1.4290. A break below it would suggest a test of 1.4260. Euro/dollar then has good support at 1.4165.
Initial resistance is now seen at 1.4390. Above 1.4455 the next levels are 1.4490 and 1.4525.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen edged lower on Thursday but remained stuck in an inside range. Expect choppy trading today.
Initial support remains at 112.90 from a 50-point pivot 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 113.60. 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 collapsed to a four-month low following the current-account deficit report. The downside remains favored in the medium-term and there is a medium-term bearish flag that targets 1.9650.
Immediate support is now seen at 1.9760. This is followed by 1.9850.
Initial resistance is at 1.9865. The next one is at 1.9960. Distant resistance now follows at 2.0055.
Oscillators are declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss struggled to a new high for the uptrend on Thursday. Its uptrend still looks good but 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 1.1555. This is followed by 1.1480. The next level is 1.1450.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bearish