Daily Forex Market Commentary

GFT Daily Forex Market Commentary for January 15, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT

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The market was choppy on Friday, as expected, with the US retail sales report great only the surface.
The dollar sank further against the pound and slipped a little versus the euro and the franc. Dollar/yen ended little changed and this warns of a pullback. The US currency should struggle higher today.

The euro/dollar recovered from a seven-week low on Friday, 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: Slightly bearish
LONG-TERM: Bullish

Dollar/yen climbed to a marginally new 13-month high on Friday. While it closed unchanged, raising the risk of a corrective decline, it remained comfortably above the psychological 120 mark. Sterling/yen crosses should provide direction again.

The pair now has 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.


Sterling/dollar rallied sharply on Friday as well, a day after the BoE surprised the market with a rate hike. The move is overdone and Cable should decline, but don’t sell without confirmation.

Immediate resistance is at 1.9630. Above it, the pair has strong resistance at 1.9695.

Below 1.9284, support comes at 1.9223 from a Fibonacci retracement level. The next big level is 1.9180. If it can break below it, then look for a sharp leg of the decline.

Oscillators are mixed.

MEDIUM-TERM: Mixed with downside bias

Dollar/Swiss franc
Dollar/Swiss franc hit a new high for the uptrend on Friday before reversing gains. The pair should edge lower still before resuming its uptrend.

Initial resistance is 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

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