Wednesday October 25, 2006 - 13:19:52 GMT
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Daily Forex Market Commentary for October 25, 2006
Forex Market Commentary for October 25, 2006
GFT Daily Forex Market Commentary by Cornelius Luca
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The dollar consolidated on Tuesday, as expected, and should do the dame for most of the day on Wednesday. With the US elections two weeks away and the economy in reasonably good shape, but bound to weaken, the Fed will leave rates unchanged.
Euro/dollar reversed an early decline and closed marginally higher on Tuesday. The support at 1.2520 held, so look for sideways to higher trading on Wednesday.
Initial resistance is at 1.2580. Above 1.2650, resistance is seen at 1.2710. Strong resistance is then seen at 1.2765, but the pair should not challenge it.
If 1.2520 breaks, then expect the euro/dollar to challenge 1.2490. That could lead to a test of the pivotal low at 1.2460.
Oscillators are declining.
NEAR-TERM: Mixed with bullish bias
Dollar/yen marched further up on wednesday before giveing up its gains, and the 119.65 Gann pivot worked like a charm. It should attempt to break the "magic" 120 level, but I doubt it can get much further than that.
Strong resistance remains at 119.65 from a 50-point pivot that targets 119.15 and 120.15. If the defense of the KO options at 120 is somehow surpassed, expect heavy hunting for stop-loss orders. Above 120.15, resistance is seen at 120.50.
Below 119.00, dollar/yen has support at 118.25 by another 50-point pivot that targets 117.75 and 118.75. Distant support is at 116.85 by a 50-point pivot, which targets 116.35 and 117.35
Oscillators are rising.
MEDIUM-TERM: Slightly bullish
Sterling/dollar reversed early losses to end little changed on Tuesday. This lack of direction suggests at least some consolidation today as well.
Immediate support is at 1.8673. That is followed by 1.8660 and 1.8605. Distant support is at 1.8514.
Above 1.8755, resistance is still seen at 1.8795. A pivtoal level lies at 1.8858.
Oscillators are declining.
MEDIUM-TERM: Slightly bearish
Dollar/Swiss consolidated as expected on Tuesday after rallying sharply a day earlier. Again, it would take a break above 1.2700 to convince us that this upmove has legs, but the odds are better for a mild decline.
Above 1.2700, the pair retains a pivotal high at 1.2770. Further resistance is at 1.2818.
Below 1.2630, dollar/Swiss franc has support at 1.2582. Only a break below 1.2525 would signal aggressive weakness and a test of 1.2470.
Oscillators are mixed.
MEDIUM-TERM: Mixed to slightly bullish
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