Tuesday September 18, 2007 - 12:43:15 GMT
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Daily Forex Market Commentary for Tuesday, September 18, 2007
Tuesday, September 18, 2007 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT
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GFT Daily Market Commentary
The dollar rallied further versus the pound on Monday in the wake of the Northern Rock situation, even though the UK entity said it had not yet drawn any funds from an emergency facility from the Bank of England. The dollar marked time otherwise on Monday, as all eyes are on what will the Fed will do today: cut the discount rate, and if so only 25 basis points, cut the Fed funds, and if so by 25 basis points? Iâ€™ll have to go with the latter. Thus, once again, carefully hold long crosses against the yen and short crosses versus the pound.
The euro/dollar made little progress on Monday as well, as the overbought pair didnâ€™t form a bearish reversal. The downside is still favored.
Below 1.3840, euro/dollar now has support at 1.3790. This is followed by 1.3720 and 1.3635. Only a break below 1.3600 would signal the start of a downmove.
Initial resistance is seen at 1.3927. Next resistance is pegged at 1.3955. Above 1.4000 there is distant resistance at 1.4085.
Oscillators are rising.
NEAR-TERM: Mixed with downside bias
Dollar/yen did nothing on Monday, and the upmove seems limited. Only a close above 115.80 signals further strength.
Strong resistance is still seen at 115.50 from a 50-point pivot, which targets 115.00 and 116.00. Distant resistance is at 117.10.
Strong support is at 114.20 from another 50-point pivot that targets 113.70 and 114.70. Distant support follows at 112.90 from a 50-point pivot that targets 113.40 and 112.40.
Oscillators are mixed.
Sterling/dollar fell further on Monday following the credit problem for Northern Rock, which required, but not used, emergency funding from the Bank of England. Further weakness is likely.
Immediate support is now seen at 1.9830. A break below this level would signal a further slide to 1.9775. Below 1.9740 there is distant support at 1.9655.
Above 2.0055, strong resistance follows at 2.0100. Distant resistance is at 2.0150.
Oscillators are falling.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Slightly bearish
The oversold dollar/Swiss marked time in an inside range on Monday. Following a brief bounce the sell-off should continue.
Immediate support is still in place at 1.1855. Below 1.1803, support is seen at 1.1788 and ten at 1.1740 from a pivotal low. Distant support is at 1.1715
Initial resistance remains in place at 1.1924. Above it, resistance is at 1.1970. Distant resistance comes at 1.2025.
Oscillators are slightly bullish.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Slightly bearish
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