Daily Forex Market Commentary
GFT Daily Forex Market Commentary for January 4, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
The dollar surged on Wednesday with help from US strong data to reverse the losses made on Tuesday. The ISM’s manufacturing index rose to 51.4 in December from 49.5 in November. It only blipped lower after the FOMC warned of increased risk for economic growth. Thursday should see more strength, but the market is still looking for direction early in the year.
Euro/dollar
The euro/dollar formed a bearish reversal formation on Wednesday, when it made a collapsing decline. It’s approaching the bottom of its rising channel, but there still is room on the downside.
Initial support is at 1.3135. This is an important level and a close below the latter would signal a more sustained decline. The pair would then test the support at 1.3090. There is a pivotal support at 1.3045.
Above 1.3205, euro/dollar has resistance at 1.3245. Strong resistance lies at 1.3320. That is followed by a pivotal resistance at 1.3367.
Oscillators are mixed.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Bullish
Dollar/yen
Dollar/yen broke higher on Wednesday to a new high for the uptrend and should attempt to pad its gains today. But 120 should be well defended by options traders and only a closing above it would warrant sustained gains.
The pair has strong resistance at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.
Immediate support is at 119.15. Below 118.55, dollar/yen retains distant support at 118.25 from another 50-point pivot that targets 117.75 and 118.75.
Oscillators are mixed.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Only one day after reaching its highest level in nearly one month, sterling/dollar made a collapsing decline on Wednesday and formed a bearish reversal. It should attempt to dig deeper on Thursday, but the pace of the decline should decelerate.
Initial support comes at 1.948o there is a pivotal low in the 1.9435 area. The next level is 1.9380. Distant support lies at 1.9335.
Initial resistance is at 1.9550. Above 1.9590, resistance is seen at 1.9630 and 1.9690. Above it, sterling/dollar has a pivotal resistance at 1.9745.
Oscillators are mixed.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc rallied unexpectedly on Wednesday to reach a new high for the uptrend. It should attempt to add to these gains on Thursday, but it must break above 1.2300 to signal another bout of strength.
Above 1.2300, resistance is now seen at 1.2325. Distant resistance looms at 1.2430.
Immediate support is at 1.2220. 1.2180 and 1.2140 follows that. Distant support looms at 1.2050 and then by a Gann level at 1.1995.
Oscillators are mixed.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Mixed
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