Daily Forex Market Commentary
GFT Daily Forex Market Commentary for December 28, 2006
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar declined early on Wednesday on news that the UAE will convert 8 percent of its FX reserves to euros from dollars before September 2007.
The currency recovered later on the day on news that the new homes expanded a more than forecast 3.4 percent in November. However, they contracted 15 percent on a yearly basis. It should encounter further choppy trading today, as activity will wind down for the rest of the year.
Euro/dollar
The euro/dollar gave back early gains to close little changed on Wednesday. The pair should trade sideways today.
It should probably hold above the support at 1.3075. On the other side, a close below this level would accelerate the decline. Euro/dollar then has support at 1.3030 and 1.2985.
Immediate resistance is at 1.3140 and 1.3165 follows that. Above 1.3210, euro/dollar has some resistance at 1.3260.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Bullish
Dollar/yen
Dollar/yen recovered early losses on Wednesday and should attempt to make another rally on Thursday.
Above 119.23, the pair would challenge the strong 50-pip pivot at 119.65, which targets 120.15 and 119.15. Distant resistance follows at 121.05.
Below 118.65, dollar/yen has support at 118.25 from another 50-point pivot that targets 117.75 and 118.75.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar gave back early losses on Wednesday and should consolidate today.
Initial support comes at 1.9515. If cable can penetrate below it, then look for another decline to 1.9465 and even 1.9410.
Immediate resistance is at 1.9630. Above 1.9685, the pair has resistance at 1.9730.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc rallied on Wednesday as well, as expected, and it should attempt another advance today.
Above 1.2315, strong resistance is at 1.2330. Only a close above this level would signal a more sustained recovery to 1.2433.
Immediate support is at 1.2220. 1.2160 follows that. Distant support is at 1.2105
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Mixed
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