GFT Daily Market Commentary
The dollar recovered early losses against the European currencies and surrendered gains versus the yen on Tuesday, as short-term rates for dollars declined in the aftermath of global authorities injected $250 billion into banks to alleviate the credit crisis. The crisis is far from being solved, as the decline in the stock market following the brief, if meaty, recovery on Monday reminded us. The dollar should attempt to advance versus the European and the commodity currencies on Wednesday, but take your cues in the morning from the auction set by leading European central banks.
Euro/dollar
The euro/dollar gave up early gains but my model remains long. The initial bias is now bearish.
Immediate support is at 1.3545. The next levels are 1.3500 and 1.3460. Below 1.3261, support comes at 1.3040.
Initial resistance is seen at 1.3655. This is still followed by 1.3705, 1.3785 and1.3845.
Oscillators are bullish.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Dollar/yen
Dollar/yen rallied to a one-week high, but gave it all up to close basically unchanged on Tuesday. My model remains long, but the downside is favored. The medium-term outlook is bearish.
Good support remains at 101.25 from another 50-point pivot, which targets 100.75 and 101.75. The next level is 100.25 from a 50-point pivot, which targets 99.75 and 100.75.
Immediate resistance is at 102.30 from a 50-point pivot, which targets 101.80 and 102.80. The next level is 103.40. Oscillators are bullish.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied into early Tuesday but it gave it all up into the close. My model remains long, but the downside remains favored.
Immediate support is still seen at 1.7335. The next levels are 1.7300, 1.7225 and 1.7120.
Initial resistance is at 1.7500. Good resistance follows at 1.7655. Distant resistance is seen at 1.7765.
Oscillators are bullish.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss traded sideways in an inside range and my model remains short. The medium-term risk remains on the upside.
Initial resistance is still pegged at 1.1412. The next levels are 1.1440 and 1.1605 from a pivot high.
Immediate support is at 1.1310. The next level is 1.1240. Below 1.1140, support is seen at 1.1055.
Oscillators are mixed.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish | 
