Forex Market Commentary for January 11, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar rallied unexpectedly on Wednesday as the market decided to actually focus on the currency’s oversold status. If the stocks manage to pad their gains today, the dollar should follow suit.
Euro/dollar
Euro/dollar broke out of inside range on its way to a one-week low. A break below 1.4635 would warrant more weakness.
So, 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 1.4710. Above 1.4780, the next level is 1.4825. Distant resistance follows at 1.4885.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Demand for carry trades lifter the Aussie and the Kiwi and also the dollar/yen. It remains oversold, but a break above 110.10 is needed to announce further strength.
Above 110.05 there is strong resistance at 110.35 from another 50-point pivot that targets 109.85 and 110.85.
Below 109.75, support is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Further support comes at 108.65. This is followed by 107.95 from a 50-point pivot that targets 107.45 and 108.45.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar sank to a new low for the downtrend. Cable should remain under pressure, but a bounce on profit taking is likely if the BoE keeps rates unchanged.
Below 1.9555, strong support comes at 1.9475. This is followed by 1.9340.
Initial resistance is now at 1.9660. This is followed by 1.9770.
Oscillators are sliding.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss reversed early losses on Wednesday but remains in an inside range. The overall pressure should continue even though the pair remains oversold.
Strong resistance is at 1.1190. Above 1.1250, distant resistance comes at 1.1330.
Immediate support is seen at 1.1125. Below 1.1100, 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
MEDIUM-TERM: Bearish
LONG-TERM: Bearish