Forex Market Commentary for January 8, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar managed to close higher against the European currencies and the yen on Monday. It is oversold against both the yen and the franc, so the US currency has more room on the upside.
Euro/dollar
Euro/dollar fell on Monday, as expected. Today should see yet another attack on the downside.
Immediate support remains at 1.4635. This is followed by 1.4570 and 1.4520. A break below 1.4470 would infer a test of the distant support at 1.4390.
Initial resistance is now seen at 1.4750. Above 1.4780, the next level is 1.4825. Distant resistance follows at 1.4885.
Oscillators are rising.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen made an unconvincing recovery on Monday after sinking for six consecutive days. It’s very oversold, so there is good upside risk. But clear proof of a bullish reversal or the medium-term selling pressure will continue.
Above 110.05 there is resistance at 110.35 from another 50-point pivot that targets 109.85 and 110.85.
Initial support comes at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. The next level is 108.25. This is followed by 107.95 from a 50-point pivot that targets 107.45 and 108.45.
Oscillators are falling.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar remains under selling pressure after sinking to a new 4 ½-month low on Monday. Cable should now consolidate at lower levels.
Immediate support comes at 1.9586. Further support is at 1.9555. This is followed by 1.9495.
Initial resistance is now at 1.9760. The next level is 1.9800. This is followed by 1.9900 and 1.9945.
Oscillators are sliding.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss formed a bullish reversal on Monday. The overall pressure may continue, but in the short term there is more upside risk because the pair is still oversold.
Strong resistance is at 1.1250. Distant resistance comes at 1.1330.
Immediate support is seen at 1.1125. The next level is 1.1020. Below 1.0890 from a pivot low, a distant support is now pegged at 1.0760.
Oscillators are mixed.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish