Forex Market Commentary for April 11, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar provided a heart attack-inducing performance on Thursday, when it sank aggressively overnight just to reverse losses in a dramatic fashion. The convenient explanation was ECB President Trichet, who kept unchanged inflation views; the real one is that massive buying orders were filled on the cheap. The dollar should see some strength today, but the market is rattled, so choppy trading is more likely.
Euro/dollar
Euro/dollar fell sharply on Thursday after nailing a new all-time high. We have a bearish reversal here, but the last 2 times the pair peaked, the following day was choppy with virtually no change on the close. My model turned short only a day after getting long. Only a break below 1.5720 signals a further decline though.
Below this level, important support is at 1.5623. Distant support is at 1.5540.
Initial resistance now comes at 1.5785. The next key levels are 1.5885 and 1.5914. Distant resistance remains at 1.6160
Oscillators are declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen collapsed to a nine-day low, but protection of a knockout option and massive interest below parity kept it above 100. The pair then exploded higher to recoup all of these losses. My model remains (barely) long.
Immediate resistance is at 102.30 from a 50-point pivot, which targets 101.80 and 102.80. Above 102.95, the next level is at 103.40 from a 50-point pivot, which targets 102.90 and 103.90.
Initial support is at 101.50. This is followed by 101.25 from a 50-point pivot, which targets 100.75 and 101.75.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
Sterling/dollar
The BoE 25-bp rate cut was priced in and sterling/dollar initially rallied. But the pair gave it all up. My model is still short and the bias is downward.
Immediate support is still seen at 1.9690. This is followed by 1.9650 and 1.9615. Below 1.9585, distant support is at 1.9420.
Initial resistance is at 1.9770. Above 1.9833 there is further resistance at 1.9880. This is followed by 1.9990.
Oscillators are falling.
NEAR-TERM: Bearish?
MEDIUM-TERM: Mixed with downside bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss fell to the lowest level of the month before reversing losses. My model remains barely long. Choppy trading is favored today.
Initial resistance is now seen at 1.0120. This is followed by 1.0180 and 1.0251.
Immediate support comes at 1.0015. This is followed by .9975 and .9945. The next support remains at 0.9875. Distant support is at 0.9750.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish