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Daily Market Commentary

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The dollar should consolidate further during this short week

Tue, Nov 21 2006, 07:20 GMT
by Cornelius Luca

GFT  |  View company's profile


On Monday the dollar ended flat against the euro and the franc, up agaisnt the yen and down versus the pound, as the market responded to yen-cross trading and to the high UK home prices. The dollar should consolidate further during this short week, as the markets will pretty much come to a standstill from late Wednesday because of Thanksgiving. The immediate bias is mixed as well.

Euro/dollar

Euro/dollar slipped from a four-day high to close unchanged on Monday. The medium-term outlook remains positive, but sideways to lower trading should persist during this short week.

Initial resistance remains at 1.2850. Above 1.2900, resistance is seen at 1.2938 and 1.2955.

The pair retains initial support at 1.2795. A close below this strong level would signal a decline to 1.2750.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/yen

The dollar/yen advanced on Monday because the yen was sold versus the euro, Aussie, etc. The Gann pivot point at 118.25 still rules. Sideways trading is favored.

So, initial resistance is at 118.25 from another 50-point pivot that targets 117.75 and 118.75. Strong resistance is at 119.86.

Immediate support is 117.75. Below 117.35, dollar/yen has support at 116.85 by a 50-point pivot, which targets 116.35 and 117.35.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish

Sterling/dollar

Sterling/dollar marched higher on Monday, as the stubbornly high UK home prices fanned concern of additional rate tightening. While mixed trading remains favored early in the week, the medium-term outlook is now negative.

Above 1.8966, good resistance remains at 1.9010. That is followed by 1.9050 and 1.9105.

Initial support comes at 1.8925. It would take a close below 1.8900 to confirm a sustained decline.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish

Dollar/Swiss franc

Dollar/Swiss recovered from a four-day low of 1.2395 to close unchanged on Monday. The pair should bounce today or tomorrow, but the medium-term outlook is still negative.

Initial resistance is at 1.2475. Above 1.2500, next levels are at 1.2580 and 1.2620.

Below 1.2395, support remains at 1.2360. Below 1.2345, support now lies at 1.2250.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

Published on  Tue, Nov 21 2006, 07:23 GMT


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