Thursday January 11, 2007 - 14:47:23 GMT
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Daily Forex Market Commentary for January 11, 2007
GFT Daily Forex Market Commentary for January 11, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar rallied across the board on Wednesday and this upmove was backed by the narrower than expected US trade deficit. The improvement should not last, but thatâ€™s a different story. The dollar moved up too much too fast, so it should now make a mild pullback before attempting another rally.
The euro/dollar fell to the lowest level since November 23 and formed a double top formation. This bearish reversal pattern targets the 1.2665 area in the medium term. For now, it should make a temporary recovery.
Immediate resistance is in place at 1.2985. The next level is 1.3030. Above 1.3065, euro/dollar has resistance at 1.3105. The next level is 1.3135.
Initial support is seen between 1.2930 and 1.2915. Below this area, the pair has strong support at 1.2860. A break below this level would signal a further significant decline to 1.2763.
Oscillators are falling.
NEAR-TERM: Slightly bullish
Dollar/yen rallied on Wednesday to a near three-month high. The bias remains skewed to the upside, but the top still looks blocked by the psychologically significant 120. Once again, look at the European currencies/yen crosses for additional cues.
The pair retains strong resistance at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15. Distant resistance follows at 121.05 from another 50-pip pivot, which targets 121.55 and 120.55.
Below 119.15, support comes at 118.80. Below 118.55, support is still seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75
Oscillators are mixed.
Sterling/dollar fell on Wednesday, as expected, but remained within recent ranges. It should edge up today before resuming its decline.
Immediate resistance is at 1.9400. Above 1.9450, the pair has strong resistance at 1.9485 and then at 1.9510. Further resistance remains at 1.9570.
Below 1.9300 the pair has support at 1.9250 and then 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.
Oscillators are mixed.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed with downside bias
Dollar/Swiss franc rallied further on Wednesday to reach the highest level since November 17, and the continued to benefit from the laissez-faire attitude of the SNB toward its weak currency. The pair should correct lower before attempting to resume its uptrend.
Immediate support now comes at 1.2415. The next level is 1.2355. Below 1.2290, 1.2260 and 1.2180 follow.
Initial resistance is at 1.2485. A Gann retracement level follows at 1.2550. Further resistance is at 1.2580 and a distant cap is at 1.2660
Oscillators are rising.
NEAR-TERM: Slightly bearish
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