Wednesday December 13, 2006 - 14:22:40 GMT
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Daily Forex Market Commentary - 12/13/2006
GFT Daily Forex Market Commentary for December 11, 2006
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar took another hit late on Tuesday following news that the Federal Reserve noted a substantial cooling in the housing market. The FOMC kept the benchmark interest rate at 5.25 percent and said inflation remains a risk. There was limited reaction to news that the US trade balance narrowed in October - the improvement will not last. The dollar is at risk for another decline early today.
The euro/dollar rallied further on Tuesday and recovered more than two thirds of the losses encountered on Friday. The pair must hold below 1.3300 if it is to resume its decline.
Above 1.3300. resistance is seen at 1.3335. The euro/dollar would then face its pivotal resistance at 1.3367, but it's unlikely that it will advance so far before resuming its decline. Distant resistance loms at 1.3455.
The pair has immediate support at 1.3273. Below 1.3250, the pair has support at 1.3195. It would take a close below 1.3125 to signal the resumption of a sustained decline.
Oscillators are rising
NEAR-TERM: Mixed to slightly higher
Dollar/yen edged lower but remained in an inside range after nailing a near three-week high on Monday. The upmove should stall.
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 rallied again on Tuesday to erase about 61.8% of the kosses incurred this month. The resistance at 1.9748 must hold if the pair is to resume its decline..
Above this level, resistance is at 1.9795 and this level must give way to encourage further strngth. There is a pivotal high at 1.9846. The pair has distant resistance at 1.9978.
Initial support comes at 1.9650. The next level is 1.9605 from a Gann retracement level. If Cable can break it, then look for another decline toward 1.9525 .
Oscillators are rising.
NEAR-TERM: Mixed to slightly bullish
Dollar/Swiss franc eased for the second say and it must turn aroubd quickly if it is to resume its upmove.
Immediate support is seen at 1.1965. 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.
NEAR-TERM: Mixed to slightly bearish
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