Forex Market Commentary for January 2, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar rallied on the last day of 2007 in thin trading following an unexpectedly good sales of existing homes report in November. Of course, this is old data and will not last long, but the memory in FX is short. The US currency should consolidate on the first day of 2008. Happy New Year!
Euro/dollar
Euro/dollar fell sharply from a two-week high on Monday. Today should see only consolidation as desks are getting re-occupied.
Immediate support is seen at 1.4520. A break below 1.4470 would infer a test of the distant support at 1.4390.
Initial resistance is seen at 1.4635. Only a break above 1.4715 would mean that Monday’s slide was a fluke. The next level would then become 1.4800. Distant resistance follows at 1.4885.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell further on Monday on liquidation of long carry trades. It should trade sideways on Monday.
Initial support remains at 111.60 from a 50-point pivot that targets 112.10 and 111.10.
Immediate resistance is at 112.55. Strong resistance follows at 112.90 from a 50-point pivot, which targets 113.40 and 112.40 in place at 113.85.
Oscillators are falling.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Mixes
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar failed to clear the resistance from its 20-day moving average on Monday, confirming my expectations that the upside was limited, and aggressively reversed its early gains. Cable should now consolidate.
Initial resistance is at 1.9945. Above 2.0000, the next level to deal with is at 2.0055. Distant resistance follows at 2.0260.
Immediate support comes at 1.9800. This is followed by 1.9745. Further support is pegged at 1.9698 from a pivot low.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss reversed further losses made early on Monday but the recovery was probably too misguided and today should see a bit of siesta.
Immediate support is now seen at 1.1265. The next level is 1.1225. Below 1.1160, support is pegged at 1.1100.
Initial resistance comes at 1.1370. Above it, resistance comes at 1.1415 and 1.1525.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish