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Daily Market Commentary

The dollar had a good day versus the European and the antipodean currencies

Fri, Nov 30 2007, 13:49 GMT
by Cornelius Luca

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The dollar had a good day versus the European and the antipodean currencies on Thursday and carry trades suffered minor losses on profit taking. It wasn’t easily given the abysmal US new home sales report, but the dollar should see more of this today. On Friday, be on the lookout for the release of the Personal Income/Spending report for October, the Chicago PMI report for November and the Construction Spending report for October.

Euro/dollar

The overbought euro/dollar sank on Thursday, this time on a closing basis, but got stuck in an inside range. It needs to break out and if it does so on the downside, then it must deal with the support from the rising 20-day moving average. This suggests another day of choppy trading. Initial support remains at 1.4695. Below this important level, the next floor is at 1.4600. This is followed by 1.4560 and 1.4495. If 1.4695 holds, then look for a rally to 1.4810. The next resistance is still pegged at 1.4910. Above 1.4940, strong resistance is seen at 1.4966. This is followed by 1.5000.

Oscillators are mixed.

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

Dollar/yen

Dollar/yen consolidated in an inside range and closed virtually unchanged on Thursday. If it fails to break clearly above 110.70, consider selling some. Immediate resistance remains at 110.35 from a 50-point pivot that targets 109.85 and 110.85. Strong resistance follows at 111.00. Good support comes at 109.15 from another 50-point pivot that targets 109.65 and 108.65.

Oscillators are rising.

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

Sterling/dollar

The high-yielding sterling/dollar suffered sharp losses on Thursday’ that obliterated its gains a day earlier in part on profit taking on carry trades and in part on a dismal UK housing report. It is now approaching the bottom of a rising channel, so only a break lower would warrant further losses. Immediate support now comes at 2.0580. A break below this level would signal the end of the rising channel. Below 2.0520, there is distant support at 2.0455. Immediate resistance is seen at 2.0730. Above 2.0833, resistance remains at 2.0875. Distant resistance looms at 2.0980.

Oscillators are mixed.

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

Dollar/Swiss franc

Dollar/Swiss rallied for a third straight day on Wednesday and touched the resistance of its declining 20-day moving average. This means it’s no longer oversold in the short term. Only a break above this average would encourage a further rally. Initial resistance comes at 1.1207 from this average. This is followed by 1.1285. Distant resistance is at 1.1390. Immediate support is at 1.1106. This is followed by 1.1060 and 1.1010. Below 1.0960, support remains pegged at the pivotal low of 1.0892.

Oscillators are rising.

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

Published on  Fri, Nov 30 2007, 13:51 GMT

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