Daily Forex Market Commentary
GFT Daily Forex Market Commentary for December 18, 2006
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
The dollar rallied further on Friday and erased most of its losses triggered during the Thanksgiving sell-off. With Christmas approaching fast, the markets are winding down for the year, so expect whippy trading. Following some pull back on profit taking, the dollar should attempt a final rally.
The overbought euro/dollar fell further on Friday and on the week it gave back nearly 38.2% of the gains made between the first half of October and the end of November.
This confirms that a significant peak is in place and the pair should make a further decline.
It should challenge the nearby support at 1.3055 and a close below it would accelerate the decline. Euro/dollar then has support at 1.2985.
Above the very strong 1.3130 level, euro/dollar has resistance at 1.3230 and then at a distant 1.3290.
Oscillators are falling.
NEAR-TERM: Mixed with bearish bias
Dollar/yen climbed further on Friday and the upside remains cautiously positive.
The pair is now challenging the resistance at 118.75, which is the target of the 118.25 pivot. Next level is now the 50-point pivot at 119.65, which targets 116.15 and 120.15.
Below 117.75, there is support at 117.10. A break above this strong level would test the 50-point pivot at 116.85, which targets 116.35 and 117.35.
Oscillators are rising.
NEAR-TERM: Slightly bullish
Sterling/dollar made another mild decline on Friday. It must close below 1.9500 to signal a continuation of the decline and odds ate that cable will consolidate today.
Below this level, support comes at 1.9509 at 1.9460 and then at 1.9410. Strong support remains at 1.9335 from a Fibonacci retracement level.
Initial resistance is at 1.9560. Above 1.9610, the pair has resistance at 1.9675 from a Fibonacci retracement level.
Oscillators are declining.
Dollar/Swiss franc rallied further on Friday and should attempt to climb higher today as well, despite being overbought in the short term. The pair formed an inversed head and shoulders, which targets the 1.2310 area.
Above the Fibonacci retracement level at 1.2230, the pair has resistance at 1.2310 and 1.2330.
Immediate support is at 1.2160. That is followed by 1.2090.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
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