Wednesday January 16, 2008 - 14:13:02 GMT
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Daily Forex Market Commentary for 1/16/2008
Wednesday, January 16, 2008 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT
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The dollar buckled early on Tuesday under the load of soft US economic data, which fueled expectations for a recession, but managed to recover aggressively versus all but the yen. This means the carry trades are melting away on risk adversity and their weakness should continue. The dollar should attempt to pad its gains here.
Euro/dollar failed to match its record high from November and its subsequent decline formed a bearish reversal formation. The downside is favored.
Immediate support is seen at 1.4760. This is followed by 1.4640. Distant support comes at 1.4580.
Initial resistance is now seen at 1.4830. The next level is 1.4910. Above the pivotal high at 1.4966, distant resistance follows at 1.5005.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias
Dollar/yen collapsed to a 2 Â½-year low on Tuesday amid liquidation of long carry trades. The downside remains favored.
Support is seen at 106.20. Below 105.30 there is distant support at 104.25.
Initial resistance now comes at 107.95 from a 50-point pivot that targets 107.45 and 108.45. Distant resistance follows at 109.15 from a 50-point pivot, which targets 109.65 and 108.65.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
Sterling/dollar rallied aggressively, but relatively briefly, mostly on long liquidation in euro/sterling and then gave back most of its gains. Cable should now consolidate at the low levels.
Immediate support is at 1.9525. Below 1.9484, strong support now comes at 1.9430. This is followed by 1.9340.
Initial resistance is seen at 1.9635. This is followed by 1.9680 and 1.9770.
Oscillators are sliding.
Once again, dollar/Swiss remains under pressure after sinking to a new low for the downtrend. The overall pressure should continue even though the pair remains oversold.
Immediate support is still seen at 1.0856. Below it, a distant support is now pegged at 1.0760.
Initial resistance is still seen at 1.0980. The next level is 1.1070. Strong resistance remains at 1.1190.
Oscillators are declining.
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