Tuesday December 12, 2006 - 13:30:21 GMT
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Daily Forex Market Commentary - 12/12/2006
GFT Daily Forex Market Commentary for December 12, 2006
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar reversed its early gains on Monday on profit taking after making an aggressive rally on Friday. The decline was helped by former Federal Reserve Chairman Greenspan, who said the US currency will probably keep declining because of the nation's current-account deficit. The pressure was increased by his additional statement that it was imprudent to hold everything in a single currency. I am not sure why long-term economic views have an impact on the spot market, so this move should not last. The key to this move is the yen crosses, which should keep soaring.
The euro/dollar fell sharply only early on Monday and then reversed all of ita losses - and part of Friday's as well. It should now attempt padding its recovery a little more before turning down again.
Initial resistance is at 1.3285. Above it, euro/dollar would face its pivotal resistance at 1.3367, but it's unlikely that it will advance so far before resuming its decline..
The pair has immediate support at 1.3195. It would take a close below 1.3125 to signal the resumption of the decline. Below it, the euro/dollar has distant support at 1.3030 and 1.2985.
Oscillators are declining.
NEAR-TERM: Mixed to slightly higher
Dollar/yen marched higher on Monday to a near three-week high in line with the bullish reversal signal on the weekly charts. Tthe upmove should continue.
Above 117.34, the pair has resistance at resistance remains at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Initial support is from the 50-point pivot at 116.85, which targets 116.35 and 117.35. Below 115.80, dollar/yen has support from the 50-pip pivot at 115.50, which targets 116.00 and 115.00. Strong support is at 114.40, which is 50% mark of a long-term uptrend.
Oscillators are rising.
Sterling/dollar fell further only early Monday and then reversed all of its losses of the day and some of Friday's as well. However, the pair must prove it can forge higher.
Immediate resistance is at 1.9590 and this level must give way to encourage further demand. Above 1.9610, the pair has resistance at 1.9675 from a Fibonacci retracement level. Distant resistance is at 1.9730.
Initial support comes at 1.9520. The next level is 1.9445 from a Fibonacci retracement level. If cable can penetrate it, then look for another decline to 1.9410. .
Oscillators are mixed
Dollar/Swiss franc made the expected rally only in early trading and then reversed these gains and some pf Friday's as well. Following some early weakness, the pair should attempt to resume its upmove
Immediate support is seen at 1.1970l. Strong support follows at 1.1930. Distant support lies at 1.1882.
Initial resistance is at 1.2046. Next there is 1.2120 from a Fibonacci retracement level. Above 1.2135, next levels remain at 1.2160 and 1.2200. Further resistance is pegged at 1.2245.
Oscillators are mixed
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