Tuesday October 5, 2004 - 13:29:01 GMT
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Daily Forex Market Commentary Tuesday, October 05, 2004 by GFT
Daily Commentary by Cornelius Luca, forex analyst, Global Forex Trading (source: http://www.gftforex.com/resources/daily.asp?date=1052004)
The dollar marched higher on Monday to complete the recovery of the losses that it incurred on Thursday. However, the dollar seems to have reached the top of its rebound so Tuesday should see mostly mixed to lower trading.
Very soon after peaking at a 2 Ĺ-month high of 1.2442, the euro/dollar slumped sharply to a one-week low of 1.2255. This slide reached the bottom of a channel rising since the first half of September so it will likely subside on Tuesday.
The pair should break the nearby resistance at 1.2320 and then reach 1.2360. A move higher would confirm further strength and the pair should then take out the 1.2410 level as well. The euro/dollar should not challenge the pivotal highs at 1.2442 and 1.2460.
If this recovery doesnít pan out, then look for a retracement to the area between 1.2262 and 1.2255. Only a break below this area would signal the end of the short-term uptrend and the euro/dollar would then slide to 1.2150.
Oscillators are edging lower.
NEAR-TERM: Mixed to slightly bullish
LONG-TERM: Slightly bullish
Dollar/yen shot further up on Monday but its inability to clear the 111.40 mark translated into a reduction of its intraday gains. The pair will likely take anther stab at the Fibonacci retracement level at 111.00 and this level must give way if this rebound is to continue.
If successful, dollar/yen will challenge the pivotal resistance at 111.70.
Key resistance remains in the area at 111.60 from the 50-point pivot, which targets 112.10 and 111.10.
Itís more likely that the pair will slip and test the immediate support at 110.55. A break lower would challenge 110.25. There is some support at 109.95 and strong pivotal support at 109.80. Distant remains at 109.15 from a 50-point pivot that targets 109.65 and 108.65.
Oscillators are heading higher.
MEDIUM-TERM: Slightly bullish
LONG-TERM: Slightly bearish
Sterling/dollar managed to exit the pattern of one day down/one day up that plagued it between Wednesday and Friday as it slumped to an 18-day low of 1.7811 on Monday. This weakness seems overdone, but donít take profit on short positions without some degree of confirmation.
Above the nearby resistance at 1.7850, the pair would face a barrier at 1.7925. A break higher should then test the next resistance at 1.7975. Above 1.8030, good resistance comes at 1,8080 and then at 1.8160.
Any further weakness would find good support at 1.7765. If this level gives way, then look for a decline to 1.7738, but this pivotal low should not be challenged on Tuesday.
Oscillators are declining.
NEAR-TERM: Mixed to slightly higher
LONG-TERM: Slightly bullish
Dollar/Swiss franc surged on Monday to a near two-week high of 1.2677. The late pullback suggests some retracement on Tuesday, but further confirmation is needed.
If it breaks below 1.2590, then the pair would have likely seen its short-term peak and then fall further to challenge the support at 1.2525. A break below this level would signal a decline to the nearby 1.2500 level. A move further down would accelerate the slide and dollar/Swiss could then fall as low as the pivotal low of 1.2443.
If it recovers further, then the dollar/Swiss franc must break above 1.2677. If successful, then look for a rally above 1.2712 and then to a test of the pivotal high of 1.2772 level.
Oscillators are rising.
DISCLAIMER: This forum and the information provided here should not be relied on as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. The views of the author are not necessarily those of Global Forex Trading, its owners, officers, agents or employees. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Cornelius Luca will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Cornelius Luca do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.
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