Daily Market Commentary
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The dollar surged on Friday as strong US data confirmed
Mon, Dec 17 2007, 07:09 GMT
by Cornelius Luca
The dollar surged on Friday as strong US data confirmed that Fed Chairman Bernanke made the right decision in not cutting the Fed Funds rate by more than 25 bps. The dollar looks like it’s already bottomed at least against the European currencies, but the next upmove should be choppy. Monday should first see some profit taking.
Euro/dollar
Euro/dollar held below the 20-day moving average and hit a 1 ½-month low on Friday. It probably is on the verge of starting a significant downtrend but the confirmation would come only from a close below 1.4250,. In addition, there is a head-and-shoulders formation targeting 1.4085. Immediate support is at 1.4354. A break below this Fibonacci retracement level would suggest a test of 1.4290. Below 1.4250, euro/dollar has good support at 1.4165. Initial resistance is seen at 1.4525. Above 1.4635, strong resistance is seen at 1.4750.
Oscillators are declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied to a five week-high on Friday and more strength is likely. A close above 114.30 is needed to warrant medium-term strength. Don’t forget that there is a bullish flag that targets the 114.25 area and an inversed head-and-shoulders pattern that targets 115.10. Immediate resistance is 114.20. The next level is 115.00. Initial support now comes from a 50-point pivot at 112.90 that targets 113.40 and 112.40. The next level is at 111.60 from a 50-point pivot that targets 112.10 and 111.10.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar collapsed to an 11-week low on Friday and the downside remains favored. A medium-term bearish flag targets 1.9650. Immediate support is now seen at 2.0085. Next strong level follows at 2.0030. Initial resistance is at 2.0265. This is followed by 2.0374.
Oscillators are declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss surged to a five-week high and should test the 1.1610 area. A close above this level would signal further strength. Initial resistance is thus at 1.1610. Above it, resistance comes at 1.1710 and 1.1750. Immediate support is now seen at 1.1475. Below 1.1395, support is pegged at 1.1350.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Published on Mon, Dec 17 2007, 07:11 GMT
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