Forex Market Commentary for January 14, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar made little progress on Friday, edging higher versus the European currencies and slipping against the yen. All eyes are on the unraveling of the subprime disaster and on the stock indices. There is downside risk in euro/sterling and upward risk for euro/Swiss. The dollar has a downward bias as well.
Euro/dollar
Euro/dollar consolidated below the high reached on January 4. A break above that high price is needed to signal more strength.
Initial resistance is still seen at 1.4830. Above 1.4885, distant resistance follows at 1.4971.
Immediate support is seen at 1.4760. This is followed by 1.4635. Distant support comes at 1.4565.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen declined further on Friday. It remains oversold, but only a break above 110.10 would rectify this situation.
Support is seen at 108.10. This is followed by 107.95 from a 50-point pivot that targets 107.45 and 108.45.
Initial resistance moved to 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Above 110.05 there is strong resistance at 110.35 from another 50-point pivot that targets 109.85 and 110.85.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar recovered most of its losses after sinking to a new low for the downtrend. Cable should remain under pressure, but there is upward risk from long liquidation in euro/sterling.
Below 1.9484, strong support now comes at 1.9430. This is followed by 1.9340.
Initial resistance is seen at 1.9635. This is followed by 1.9680 and 1.9770.
Oscillators are sliding.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss also recovered most of its losses after sinking to a new low for the downtrend. The overall pressure should continue even though the pair remains oversold.
Immediate support is now seen at 1.0980. Below 1.0890 from a pivot low, a distant support is now pegged at 1.0760.
Initial resistance is still seen at 1.1070. Strong resistance is at 1.1190.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish