Monday January 8, 2007 - 14:24:51 GMT
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Daily Forex Market Commentary for January 8, 2007
GFT Daily Forex Market Commentary for January 8, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar surged further on Friday versus the European currencies, but fell against the yen again, in the wake of the strong US non-farm payrolls. This means the carry trades are feeling even more heat, and the risk of their demise is increasing. Following a correction on Monday, the dollar should attempt to pound more on the European currencies.
The euro/dollar sank aggressively on Friday as well, hitting a six-week low of 1.2980, after forming a bearish reversal formation on Wednesday. After a brief bounce, it should make another run on the downside.
Below 1.2980, the pair has strong support at 1.2930. A close below this level would signal a further significant decline to 1.2860.
Above 1.3050, euro/dollar has resistance at 1.3105. The next level is 1.3135.
Oscillators are falling.
Dollar/yen trimmed losses on Friday but made little progress, as all eyes are on the plunging the European currencies/yen crosses.
Below 118.55, support is seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75. Further support is at 117.10.
Above 119.05, the pair retains strong resistance at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.
Oscillators are mixed.
NEAR-TERM: Mixed with bearish bias
Sterling/dollar made another collapsing decline on Friday after forming a bearish reversal on Wednesday and reached a six-week low. After a short recovery, it should attempt making another decline. This slide formed a double top formation. The neckline of this bearish reversal formation, which must be broken on a closing basis, lies at 1.9380 and the target is the 1.9000 area.
Below 1.9284, support comes at 1.9223 from a Fibonacci retracement level. The next big level is 1.9180. If it can break below it, then look for another sharp decline.
Immediate resistance is at 1.9340. Above it, the pair has strong resistance at 1.9440 and then at 1.9485.
Oscillators are falling.
MEDIUM-TERM: Mixed with bullish bias
Dollar/Swiss franc rallied further on Friday to a six-week high of 1.2393. After a pullback on Monday, it should attempt adding to its gains.
Initial resistance is at 1.2365.Above 1.2393 resistance is at 1.2430. Next level is 1.2485. A Gann retracement level follows at 1.2550. Above
Immediate support comes at 1.2325. That is followed by 1.2180. Strong supports follow at 1.2135, 1.2105, 1.2050 and 1.1995. The key level is 1.2135.
Oscillators are rising.
NEAR-TERM: Mixed with risk of either way breakout
MEDIUM-TERM: Mixed with bearish bias
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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