Daily Forex Market Commentary
GFT Daily Forex Market Commentary for January 16, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
The market was divergent on Monday, with the pound rallying further on the back good economic data and cross trading and the dollar/yen consolidating ahead of the expected rate hike later this week. Again, the dollar should struggle higher today.
Euro/dollar
The euro/dollar edged marginally higher in this trading, but remains under the pressure of a slanted double top targeting the 1.2690 area. While the bias remains on the downside, the pair must close below 1.2925 to trigger further losses.
Below 1.2868, the pair has strong support at 1.2820. A close below this level would signal a further significant decline to 1.2760.
Above 1.2970, euro/dollar has resistance at 1.3015.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
With all eyes on the expected BoJ’s insignificant rate hike from .25 percent, traders played “hot potato with the dollar/yen on Monday. The pair had reached a 13-month high on Friday and held above 120. It closed little changed and this raises the risk of a corrective decline, The Europe/yen crosses should provide direction again.
The pair retains strong resistance at 121.05 from another 50-pip pivot, which targets 121.55 and 120.55. There is a pivotal high at 121.40.
Initial support is at 120.15. Strong support follows at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15. Distant resistance is seen at 118.80.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied on Monday as well, reaching a 12-day high, as prices of houses in London continue to inflate and the sterling/yen cross remains in demand. The move is overdone but only sell the Cable on a confirmation.
Immediate resistance is at 1.9670. Above 1.9695, the pair has very important resistance at 1.9725. If this long-term trendline gives way, then the distant pivotal resistance at 1.9846 may come to the front burner.
Below 1.9605, support comes at 1.9570. Distant support is now seen at 1.9510.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed with downside bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc consolidated quietly after hitting a new high for the uptrend on Friday. The pair should edge lower before resuming its uptrend.
Initial resistance remains at 1.2528. Above 1.2550, resistance comes at 1.2660 from the target of a bull flag.
Immediate support comes at 1.2430. That is followed by 1.2385.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
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