Daily Forex Market Commentary
GFT Daily Forex Market Commentary for January 9, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
The dollar made the expected correction on Monday after surging aggressively for three days against the European currencies, and treaded water versus the yen. Sterling/dollar rallied mostly because of a large Saudi order of British fighter planes. Once again, following some further consolidation today, the dollar should attempt to advance further against the European currencies.
Euro/dollar
The euro/dollar reversed losses after hitting a marginally new six-week low of 1.2972 on Monday. After another mild bounce, it should try making another run on the downside.
Above 1.3065, euro/dollar has resistance at 1.3105. The next level is 1.3135.
Initial support is at 1.2995. Below 1.2980, the pair has strong support at 1.2930. A close below this level would signal a further significant decline to 1.2860.
Oscillators are falling.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen closed marginally higher after recouping early losses, but got stuck in an inside range on Monday. The answer remains in the European currencies/yen crosses.
Above 119.05, the pair retains strong resistance at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.
Below 118.55, support is still seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75. Further support is at 117.10.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar recouped just about half of the losses incurred on Friday, as expected. The recovery was fueled by commercial demand. After another recovery today, the pound should attempt making another decline. The double top formation remains in play and the neckline of this bearish reversal formation is at 1.9380. The target is the 1.9000 area.
Immediate resistance is at 1.9450. Above it, the pair has strong resistance at 1.9485 and then at 1.9510. Further resistance is at 1.9570.
Initial support lies at 1.9385. Below 1.9340 the pair has support at 1.9250 and then at 1.9223 from a Fibonacci retracement level. The next big level is 1.9180. If it can break below it, then look for another sharp decline.
Oscillators are mixed.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc rallied further on Monday to a six-week high of 1.2411 before giving up most of these gains. After a mild pullback, it should attempt adding to its gains.
Initial resistance is at 1.2411. Next level is 1.2485. A Gann retracement level follows at 1.2550. Above
Immediate support comes at 1.2335. That is followed by 1.2260 and 1.2180. Strong supports follow at 1.2135, 1.2105, 1.2050 and 1.1995.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Mixed
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