Forex Market Commentary for January 22, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar surged more than expected versus the European currencies, while the yen strengthened amid long liquidation of carry trades and other yen crosses. The magnitude of the moves was exacerbated by the thin US markets, so a brief bounce today would not be surprising.
Euro/dollar
Euro/dollar collapsed to a near four-week low on Monday. Mixed to lower trading is likely today.
Immediate support is now at 1.4390. Below 1.4350 there is support at 1.4310 follows this. Distant support now comes at 1.4260.
Initial resistance is at 1.4550. This is followed by 1.4615 and 1.4670. The next level is 1.4770. Above 1.4870 there are pivotal highs at 1.4990 and 1.4966.
Oscillators are declining.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen sank to an over 2 ½-year low on Monday amid long liquidation of carry trades due to risk aversion. Mixed to lower trading remains favored, but only a break below 105.50 would warrant further weakness.
Immediate support is now seen at 105.50 from a 50-point pivot, which targets 115.00 and 116.00. Distant support lies at 104.25.
Initial resistance is at 106.00. Above 106.90, distant resistance comes at 107.95 from a 50-point pivot that targets 107.45 and 108.45.
Oscillators are falling.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar remains weak after sinking to a 10-month low on Monday. Cable should consolidate today, but the risk is on the downside.
Good support is seen at 1.9330. Below 1.9295, distant support is now pegged at 1.9140.
Initial resistance is at 1.9490. The next level is at 1.9590. Distant resistance is seen at 1.9685.
Oscillators are sliding.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss broke out of an inside range on Monday on its way to an 11-day high. There still is upside risk, as the pair remains oversold.
Initial resistance comes at 1.1135. The next level is 1.1190. Distant resistance is now seen at 1.1283.
Below 1.1040, support is at 1.0980 and 1.0950. Then, there is a pivot low at 1.0840, while a distant support is now pegged at 1.0760.
Oscillators are rising.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish