GFT Daily Market Commentary
The dollar sank across the board on Monday on ongoing fears that the Fed will have no choice but cut rates further to alleviate the impact of the subprime mortgage disaster. The exception was the weak pound, which only consolidated, as the strong inflation data cannot translate into higher rates. The dollar retains a downward bias.
Euro/dollar
Euro/dollar surged close to its record high from November and its break above the high price of January 4 signals more strength.
Initial resistance is still seen at 1.4935. Above the pivotal high at 1.4966, resistance follows at 1.5005 and 1.5087..
Immediate support is seen at 1.4824. This is followed by 1.4760. Distant support comes at 1.4640. Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen sank on Monday to its lowest level since November 27 before trimming losses. It remains oversold, but again, only a break above 110.10 would rectify this situation.
Support is seen at 107.95 from a 50-point pivot that targets 107.45 and 108.45. Below 107.37 there is further support at 106.30.
Initial resistance comes at 109.00. Strong resistance follows at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Above 110.05 there is strong resistance at 110.35 from another 50-point pivot that targets 109.85 and 110.85. Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar remained under pressure after closing at the lowest level for the downtrend. Cable should remain under pressure, but there is upward risk from long liquidation in euro/sterling.
Below 1.9484, strong support now comes at 1.9430. This is followed by 1.9340.
Initial resistance is seen at 1.9585. The next level is 1.9635. This is followed by 1.9680 and 1.9770. Oscillators are sliding.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss remains under pressure after sinking to a new low for the downtrend. The overall pressure should continue even though the pair remains oversold.
Immediate support is now seen at 1.0886. Below it, a distant support is now pegged at 1.0760.
Initial resistance is still seen at 1.0980. The next level is 1.1070. Strong resistance remains at 1.1190. Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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