Friday January 25, 2008 - 13:56:40 GMT
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Daily Forex Market Commentary for 1/25/2008
Friday, January 25, 2008 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT
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The dollar fell versus the European currencies on Thursday to follow up its losses made late Wednesday, but struggled higher against the yen. Once again, hopes that government is working on a package to rescue the bond insurers and that the State of the Union will bring to fore a decent stimulus package helped the stock markets and sent the bond prices plunging, but proof is needed. With the ECB clearly not cutting rates, but with the Fed still expected to ease on Wednesday, the buck should ease. But the odds for a 50-bp cut decreased sharply. Since the waters are not crystal clear, intraday trading is still favored.
Euro/dollar rallied to an eight-day high on Wednesday and more upside is likely today.
Initial resistance now comes at 1.4800. Above 1.4870 there are pivotal highs at 1.4990 and 1.4966.
Immediate support is seen at 1.4700. Below 1.4640 there is further support at 1.4590. Distant support now comes at 1.4500.
Oscillators are rising.
NEAR-TERM: Slightly bullish
Dollar/yen rallied on Thursday, but got stuck in an inside range and closing little changed. Mixed to higher trading is still favored.
Above 107.35, strong resistance comes at 107.95 from a 50-point pivot that targets 107.45 and 108.45. Distant resistance is at 109.65.
Good support remains at 106.35. Strong support follows at 105.50 from a 50-point pivot, which targets 115.00 and 116.00. Distant support lies at 104.25.
Oscillators are mixed.
Sterling/dollar rallied to a one-week high, as it finally followed the bullish reversal formation made on Tuesday. Cable should attempt to pad its gains.
Initial resistance is at 1.9790. The next level is at 1.9850. Distant resistance is now seen at 1.9935.
Below 1.9714, good support comes at 1.9645. Below 1.9605, there is further support at 1.9520. Distant support is pegged at 1.9338.
Oscillators are rising.
NEAR-TERM: Mixed with upside risk
Dollar/Swiss remains under selling pressure after challenging its downtrend lows. This remains in line with the intermediary bearish reversal on Tuesday. The pair remains oversold, but mixed to lower trading is likely.
Immediate support comes from a pivot low at 1.0840. A distant support follows at 1.0760.
Initial resistance comes at 1.0900. This is followed by 1.0995 and 1.1060. Distant resistance is now seen at 1.1135.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
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