Forex Market Commentary for January 24, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar ended little changed on Wednesday after an exceptionally volatile day. It fell aggressively in late trading versus the euro and the pound and rallied against the low-yielding yen and franc. The shock in the markets from the massive rate cut on Tuesday and another expected cut next week, from the credit crunch and from the slide in the equity markets left FX in disarray. Hopes that government is working on a package to rescue the bond insurer brightened the Wednesday afternoon, but proof is needed. Anything but intraday trading is very risky at this point.
Euro/dollar
Euro/dollar struggled to erase losses on Wednesday after failing to pull the trigger following the bullish reversal from Tuesday. Still, more upside is likely today.
Initial resistance remains at 1.4690. The next level is 1.4770. Above 1.4870 there are pivotal highs at 1.4990 and 1.4966.
Immediate support is still in place at 1.4560. Below 1.4500 there is support at 1.44455. Distant support now comes at 1.4367.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen surged from an over 2 ½-year low on Wednesday after extremely volatile trading. Mixed to higher trading is now favored.
Above 104/35, strong resistance comes at 107.95 from a 50-point pivot that targets 107.45 and 108.45. Distant resistance is at 109.65.
Immediate support remains at 106.35. Strong support follows at 105.50 from a 50-point pivot, which targets 115.00 and 116.00. Distant support lies at 104.25.
Oscillators are mixed.
NEAR-TERM: Bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar closed lower on Wednesday. Impervious to the bullish reversal formation made a day earlier. Cable should consolidate today.
Initial resistance is at 1.9600. Above 1.9640, strong resistance is at 1.9700. The next level is at 1.9790. Distant resistance is now seen at 1.9935.
Good support remains at 1.9517. Below 1.9434, distant support is now pegged at 1.9338.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss marched lower on Wednesday, in line with the intermediary bearish reversal on Tuesday. The pair remains oversold, but mixed to lower trading is likely.
Immediate support is at 1.0900. Then, there is a pivot low at 1.0840, while a distant support is now pegged at 1.0760.
Initial resistance comes at 1.0995. The next level is at 1.1060. Above 1.1135, the next level is 1.1190. Distant resistance is now seen at 1.1283.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish