Daily Forex Market Commentary
GFT Daily Forex Market Commentary for January 3, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
The dollar fell versus the European currencies on the first day of 2007, but recouped early losses against the yen. This means the carry trades remain in perfect shape, so keep your eyes in the rallying yen crosses. The dollar weakness also owed to an expected weak US ISM report, which was delayed for Wednesday. The short-term outlook is negative for dollar/Europe.
Euro/dollar
The euro/dollar rallied to its highest level since December 8, as expected, and the pair should attempt to pad its gains today as well.
Above 1.3296, euro/dollar has pivotal resistance at 1.3367. Strong resistance follows only at 1.3413.
Initial support is at 1.3245. The pair then has support at 1.3210. The next levels are 1.3170 and 1.3120. A close below the latter would signal a more sustained decline.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell early Monday but then reduced its losses. It should trade sideways today.
Below 118.55, dollar/yen retains support at 118.25 from another 50-point pivot that targets 117.75 and 118.75. Next level is at 117.20.
Immediate resistance remains at 119.05. The pair has strong resistance at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar surged on Tuesday to its highest level in nearly one month. It should attempt to advance today as well.
Above 1.9765, resistance is seen at 1.9820. Above it, sterling/dollar has a pivotal resistance at 1.9838.
Initial support comes at 1.9675. The next big level is 1.9630. If cable can penetrate below the rising short-term trendline at 1.9590, then look for another decline to 1.9530.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc fell on Tuesday and should attempt to dig deeper today as well.
Immediate support is at 1.2080. That is followed by 1.2050 and then by a Gann level at 1.1995. Strong support follows at 1.1930.
Initial resistance is at 1.2175. Above 1.2225, resistance is in place at 1.2270.
Oscillators are mixed.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Mixed
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