Daily forex market commentary

Forex Market Commentary for October 19, 2006 by Cornelius Luca
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The dollar faced choppy trading and closed very little changed on Wednesday.
The CPI fell 0.5% in September after rising 0.2% in August, and the core CPI rose 0.2%. Housing starts unexpectedly rose 5.9% in September but permits fell 6.3% to the lowest rate since October 2001. Expect more choppy trading today. Only the Philly Fed report could be a market mover.

Euro/dollar traded sideways and closed virtially unchanged on Wednesday but remained well within Friday’s range again. It should trade sideways again.

Initial support is at 1.2470. Next support comes at 1.2410. A close below this level would also trigger a double top formation, which targets 1.1920. But that remains far away. Below 1.2370, support now comes at 1.2310.

Above 1.2576, the euro/dollar has resistance at 1.2615. Strong resistance follows at 1.2650.The pair must close below the strong support at 1.2470 to confirm versus weakness.

Oscillators are declining.

LONG-TERM: Bullish

Dollar/yen fell to as low as 118.31 on Wednesday, but again it recovered most of its losses, so Thursday should see an attempt of recovery.

Initial resistance is at 119.00. The key level resistance is at 119.65 from a 50-point pivot that targets 119.15 and 120.15. Above 120.15, resistance is seen at 120.50. Further resistance is the pegged at 121.05 from another 50-point pivot that targets 120.55 and 121.55.

Below 115.50, dollar/yen has support at 118.25 by another 50-point pivot that targets 117.75 and 118.75.

Oscillators are rising.

MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish

Sterling/dollar rallied to a 12-day high on Wednesday before edging lower. Choppy trading should persist, but the downside is favored.

Immediate support is stillseen at 1.8660. That’s followed by 1.8600 and 1.8555.

Initial resistance is seen at 1.8734. Above 1.8770, resistance comes at 1.8800 and 1.8860.

Oscillators are declining.

NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss traded sideways and closed with small gains. It should see some very mild strength today.

Initial resistance is at 1.2750. Above 1.2768, the pair still has resistance at 1.2800. Next level is at 1.2910.

Below 1.2640, dollar/Swiss franc has support at 1.2590. Distant support is at 1.2500.

Oscillators are rising.

NEAR-TERM: Bearish to slightly bullish
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

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