Daily Market Commentary
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The dollar can only consolidate
Fri, Sep 26 2008, 06:23 GMT
by Cornelius Luca
Once again, it’s about the TARP these days, and until real details become available, the dollar can only consolidate. It basically climbed on Thursday, stocks rallied some as well, but it means nothing until concrete results are in. The US data was horrible on Thursday, but that was chicken feed relative to the TARP. Today we have some GDP and confidence data – pretty irrelevant since we are already in a recession. Put your seatbelts on, as volatility might do some damage ahead of the weekend. The dollar’s bias is mixed, with potential for spikes either way; but if the plan remains in danger, the dollar should get under pressure.
Euro/dollar
The euro/dollar had an outside day relative to Wednesday, but remained confined to inside range for the third day. It closed little changed, but my model remains long. If you must trade, buy it first, don’t hold positions for long. Initial resistance is at 1.4700. Above 1.4765, resistance remains at 1.4825. Then, there is a pivot high at 1.4865. Immediate support is at 1.4610. Below 1.4585, the next level is 1.4530. This is still followed by 1.4485. Distant support is at 1.4390.
Oscillators are mixed.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
Dollar/yen
Dollar/yen fell in early trading and then surged on yen cross demand. But then fell in the Far East. As it remained stuck in an inside range, my model remains long. The downside is favored first. Initial support is at 105.60 from a 50-point pivot that targets 105.10 and 106.10. Further support is at 104.50 from a 50-point pivot, which targets 104.00 and 105.00. Resistance remains at 106.75 from another 50-point pivot, which targets 106.25 and 107.25. A pivot high looms at 108.01.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Slightly bearish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar made the expected upmove in early trading, when it nailed a near five-week high, and then succumbed on Thursday. Still, my model remains long and the initial bias is up. Above 1.8475, the next resistance is now seen at 1.8530. The next level is 1.8670. Distant resistance is at 1.8795. Immediate support is at 1.8370. The next levels are 1.8308 and 1.8250. Distant support is 1.8065.
Oscillators are mixed.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss franc broke above Wednesday’s high, but my model remains short. The immediate bias is down... Initial support remains 1.0825. The next level is 1.0780. Below 1.0698, distant support remains at 1.0535. Immediate resistance is at 1.0880. The next levels are still seen at 1.0940, 1.0990 and 1.1060. Distant resistance remains at 1.1280.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Published on Fri, Sep 26 2008, 06:32 GMT
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