GFT Daily Market Commentary
Holiday or not, Monday was a big day in the financial markets. In an aggressive move, central banks flooded the financial system with liquidity, and the battered US stocks surged over 11.6 percent. In FX, the dollar melted across the board, but rallied against the yen, as yen crosses rallied. This may be only a correction, but Tuesday should see more of it.
Euro/dollar
One day after kneeling to a 1 ½-year low, the euro/dollar rallied on Monday, as expected. My model went long and the initial bias is still bullish.
Initial resistance is seen at 1.3685. This is still followed by 1.3705, 1.3785 and1.3845.
Immediate support is at 1.3575. The next levels are 1.3500 and 1.3460. Below 1.3261, support comes at 1.3040.
Oscillators are bullish.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Dollar/yen
Dollar/yen reversed further from a seven-month low coined on Friday, and my model promptly went long. The medium-term outlook is bearish, but the short term calls for further strength.
Immediate resistance is at 102.80. The next level is 103.40 from another 50-point pivot, which targets 102.90 and 103.90.
Good support is at 102.30 from a 50-point pivot, which targets 101.80 and 102.80. The next level is 101.25 from another 50-point pivot, which targets 100.75 and 101.75. Oscillators are bullish.
NEAR-TERM: Bullish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar recovered further on Monday from a near-five year low made last week and my model went long. The downside remains favored in the medium term, but there is more upside risk in the short term.
Initial resistance is at 1.7515. Good resistance follows at 1.7655. Distant resistance is seen at 1.7765.
Immediate support is at 1.7440. This is followed by 1.7335. The next levels are 1.7300, 1.7225 and 1.7120.
Oscillators are bullish.
NEAR-TERM: Bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss marched higher on Monday, but then slipped in early Tuesday trading and my model went short. Once again, the medium-term risk remains on the upside, but the downside is favored here.
Immediate support is at 1.1310. The next level is 1.1240. Below 1.1140, support is seen at 1.1055.
Good resistance is pegged at 1.1390. The next levels are 1.1412 and 1.1605 from a pivot high.
Oscillators are mixed.
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
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