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GFT Daily Forex Market Commentary for December 21, 2006
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar fell further versus the European currencies early on Wednesday, as expected, but then reversed losses to close higher and catch up with the rally against the yen. This suggests not only a dollar upmove today, but also a decline in euro/yen. Keep an eye on the avalanche of US data for further cues.
Euro/dollar
The euro/dollar stretched to as high as 1.3244 early Wednesday before turning South with gusto and reversing these gains. The pair should make a further decline today before trading will stall early Friday.
Initial support is at 1.3140. A break below this level would signal that Tuesday’s rally was a fluke. Euro/dollar would then have support at 1.3050.
Above the strong 1.3250 level, which held on Wednesday, the euro/dollar has resistance at 1.3290. There is a pivotal high at 1.3367.
Oscillators are rising.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Bullish
Dollar/yen
Dollar/yen plowed higher on Wednesday to reach a new high for the uptrend on Wednesday, helping the yen crosses reach new highs. If these overbought crosses get hurt today, then the pair will encounter selling pressure. If not, the immediate outlook is mixed.
The pair retains resistance at 118.75, which is the target of the 118.25 pivot. Next level is now the 50-point pivot at 119.65, which targets 116.15 and 120.15.
Initial support is at 118.10. Below 117.75, there is support at 117.10. A break above this strong level would test the 50-point pivot at 116.85, which targets 116.35 and 117.35.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar saw the expected strength only in early trading on Wednesday and then reversed its gains. This suggests the pair should try to dip further today.
Below 1.9620, the pound has support at 1.9590. Strong support follows at 1.9490.
Initial resistance is at 1.9690. The next cap is at 1.9755. Above 1.9800, the pair has resistance from a pivotal high at 1.9846.
Oscillators are mixed.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc made only marginal new lows on Thursday and then reversed its losses. It should attempt to pad its gains today.
Above 1.2210, the pair has resistance at 1.2265.
Immediate support is at 1.2145. The next level is 1.2070. That is followed by 1.2020 and 1.1985.
Oscillators are rising..
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Mixed
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