214140 Resource 128469 213432 213432 1223574429512 1223574429512 Controlled Forex Market Commentary for October 3, 2008 by Cornelius Luca

GFT Daily Market Commentary

The dollar continued its divergent behavior on Thursday, surging against the European currencies and declining versus the yen, as de-leveraging continued.  The euro suffered the brunt of the losses, after ECB President Trichet was a bit more dovish than expected and admitted that policy makers had discussed cutting interest rates.  Given the need for dollar funding, Friday should see the major currencies continuing their recent pattern. However, take your cues from the two key factors: the House vote on the TARP (not a sure dunk) and the nonfarm payrolls, and expect exceptional volatility. Euro/dollar The euro/dollar sank aggressively for the fourth consecutive day, dropping nearly 300 pips and reaching a four-month low. My model remains short.  Once again, I like holding short positions but remain uneasy opening fresh ones at these levels. The medium-term outlook remains negative.   Immediate support is at 1.3745. The next level is 1.3615. A distant support is in the 1.3495 area.     Above 1.3885, resistance is now seen at 1.3940. The next level is 1.4155. Distant resistance now pegged at 1.4275.Oscillators are declining. NEAR-TERM: Slightly bearish MEDIUM-TERM: Bearish LONG-TERM: BearishDollar/yen Dollar/yen reversed early gains and closed lower on Thursday. The slide was aggressive enough to turn my model short. Given the choppiness in this pair, I don’t trust this weakness much. Thus, the short-term outlook remains mixed.   Good support is now seen at 104.50 by a 50-point pivot, which targets 104.00 and 105.00.    Immediate resistance is at 105.60 from a 50-point pivot, which targets 105.10 and 106.10. The next level remains at 106.75 from another 50-point pivot, which targets 106.25 and 107.25. Oscillators are mixed. NEAR-TERM: Mixed  MEDIUM-TERM: Mixed LONG-TERM: MixedSterling/dollar Sterling/dollar fell for a fourth straight day on Thursday, reaching a three-week low, and my model remains short.  Again, the downside remains only mildly favored, as the pair is heavily oversold.    Initial support is now at 1.7550. Below a pivot low at 1.7448, distant support is at 1.7265.   Initial resistance is at 1.7710. Strong resistance remains at 1.7875. Above 1.7915, distant resistance is at 1.8085.  Oscillators are falling. NEAR-TERM: Mixed to slightly bearish MEDIUM-TERM: Bearish LONG-TERM: BearishDollar/Swiss franc Dollar/Swiss franc surged to the second high of the uptrend and my model remains long. The initial bias is bullish, but the pair remains overbought and some risk remains on the downside.     Initial resistance now comes from a pivot high at 1.1417.  Above 1.1490, distant resistance is seen at 1.1580.   Immediate support is at 1.1290. Below 1.1190, support is now pegged at 1.1135. Distant support is at 1.1000.   Oscillators are rising.   NEAR-TERM: Mixed to slightly bullish MEDIUM-TERM: Slightly bullish LONG-TERM: Bullish 10 application/xml false Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; MS-RTC LM 8; .NET CLR 3.0.04506.648; InfoPath.2; .NET CLR 3.5.21022) 127.0.0.1 127.0.0.1 kirvin 206.114.34.165 false true false false true 128469 blog blogsite/GFTForex/web