Friday December 1, 2006 - 13:50:18 GMT
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Daily Forex Market Commentary for December 1, 2006
GFT Daily Forex Market Commentary for December 1, 2006
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar made a collapsing decline on Thursday, due to pure spec and rumored corporate orders. The weak US data did not help either. The rise in volatility and seemingly clear direction are comforting, but it is hard selling more US currency when is so heavily oversold in the short term. The charts were suggesting that the buck should benefit from short covering, but this failure only adds power to the negative medium-term outlook.
The overbought euro/dollar surged to an eight-month high on Thursday as completely ignored a bearish reversal formation on the candlestick chart. The medium-term outlook remains positive, but hold short-term long positions with tight stops.
Above 1.3274, resistance is seen at 1.3300. The next level is 1.3325. Distant resistance is at 1.3405.
Below 1.3215 the pair has support at 1.3145 and then at 1.3115. Only a break below 1.3115 would signal some sustained weakness toward 1.3060. Next level is 1.3010. Distant support is at 1.2890.
Oscillators are rising.
NEAR-TERM: Slightly bullish
The dollar/yen gave back early gains and then fell sharply to return 50% of the gains made in the previous three days. The short-term outlook is cautiously negative.
Initial support is the strong 50-pip pivot at 115.50, which targets 115.00 and 116.00.
Above 115.95, resistance is seen at 116.35. The big level is at 116.85 by a 50-point pivot, which targets 116.35 and 117.35.
Oscillators are declining.
Sterling/dollar surged a whopping 250 pips on Thursday to reach a +14-year high â€“ ah, the good old times of the ERM era! All eyes are on the 2.0000 level, of course, but do not hold your breath. The pair is heavily overbought; the upside is favored, but any little pretext can trigger an aggressive move down. Hold long positions with relatively tight stops.
Above 1.9700, resistance is at 1.9780 and 1.9815. Next level is 1.9915. Above the psychological 2.0000 level, distant resistance is at 2.0100
Initial support comes at 1.9600. It would take a break below 1.9560 to signal a decline toward 1.9490. Below 1.9425, distant support is at 1.9300.
Oscillators are rising.
Dollar/Swiss collapsed to a six Â½-month low on Thursday and this stubborn weakness emphasizes the negative medium-term outlook.
Below 1.1976, pivotal support is at 1.1921. Distant support now rests at 1.1770.
Initial resistance is at 1.2015. Above 1.2060, the next level is at 1.2115. Distant resistances are at 1.2225 and 1.2275.
Oscillators are falling.
NEAR-TERM: Slightly bearish
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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