Wednesday October 6, 2004 - 13:19:59 GMT
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Daily Forex Market Commentary Wednesday, October 06, 2004 - GFT
Daily Commentary by Cornelius Luca, forex analyst, Global Forex Trading (source: http://www.gftforex.com/resources/daily.asp?date=1062004)
The dollar made the expected pullback versus the European currencies but still managed to make a choppy ascent against the Japanese yen. The US non-manufacturing ISM edged lower, as expected (see Weekly Report) so it had only a fleeting impact. The market should remain mixed ahead of release of the all-important US unemployment report on Friday.
The euro/dollar made only a half-baked recovery on Tuesday but remained well within an inside range. There is little reason to expect a break out on Wednesday, but weirder things have happened.
For this upmove to continue, the pair must break above the resistance at 1.2360. A move higher would add confidence to the trend rising since late August and the euro/dollar would then challenge the 1.2410 level. The pair should not reach the pivotal highs at 1.2442 and 1.2460 at this point.
Below the one-week low of 1.2255, the euro/dollar has interim support at 1.2235 and good support only at 1.2150.
Oscillators are edging lower.
LONG-TERM: Slightly bullish
Dollar/yen rallied for the third consecutive day on Tuesday, but once again, its inability to clear the 111.40 level triggered a pullback on profit taking. For as long as the pair holds above the Fibonacci retracement level at 111.00, the upside remains in play.
If successful in seeping its way above 111.40, dollar/yen will challenge the pivotal resistance at 111.70. Key resistance remains a tad lower at 111.60 from the 50-point pivot, which targets 112.10 and 111.10.
Only a break below 111.00 would mean that the pair would decline to test the immediate support at 110.55. A break below this level 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 was the exception from the recovery seen by the other major the European currencies. The pair only managed to recoup most of its losses after sinking to a three-week low of 1.7800 on Tuesday. Once again, this weakness seems overdone, but take profit on short positions only with a stop order.
Above the nearby resistance at 1.7850, the pair would still face a barrier at 1.7925. A break above this level would signal a test of the next resistance at 1.7975. Above 1.8030, good resistance remains at 1.8080 and then at 1.8160.
Any further decline 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 today.
Oscillators are declining.
LONG-TERM: Slightly bullish
On day after coining a two-week high of 1.2677, dollar/Swiss franc made only a weak and unimpressive decline on profit taking. Any further weakness needs confirmation
The pair needs to at least break below 1.2590 to signal that we have probably seen its short-term peak. The pound would 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. Distant support comes from the pivotal low of 1.2443.
If it resumes its upmove, then the dollar/Swiss franc must break above 1.2677. If successful, then expect 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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