Daily Forex Market Commentary

The major currencies had a divergent behavior on Wednesday in the wake of unprecedented concerted rate cuts made by six major central banks led by the Fed. Sterling/yen fell sharply, while the euro was supported by good local data. The dollar should recover against the yen and decline versus the European currencies.

Euro/dollar

The euro/dollar confirmed a bullish reversal and should struggle higher today, despite the ECB rate cut. In the medium term, the pair remains near the bottom of a declining channel support.

Resistance comes at 1.3750. Above 1.3775, the euro/dollar retains resistance at 1.3857. Distant resistance follows at 1.3980.

Immediate support is at 1.3620. The next level is 1.3443. Distant support looms at 1.3350.

Oscillators are mixed.

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

Dollar/yen

Dollar/yen collapsed to below parity on Wednesday, but recouped in early trading on Thursday. It remains below the neckline of an irregular head-and-shoulders pattern. The upside is favored today.

Immediate resistance is at 101.25 from a 50-point pivot, which targets 100.75 and 101.75. The next level comes at 102.30 from a 50-point pivot, which targets 101.80 and 102.80.

Initial support comes from another 50-point pivot at 100.25, which targets 99.75 and 100.75. Distant support is at 99.25 from another 50-point pivot, which targets 98.75 and 99.75.

Oscillators are sliding.

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

Sterling/dollar

Sterling/dollar sank to a new low for the downtrend on Wednesday. The sell-off should run out of steam, as the BoE has already cut rates.

Immediate support is seen at 1.7173. Below 1.7110, the next support follows at 1.7050.

Initial resistance looms at 1.7405. The next levels are 1.7500 and 1.7650. Above 1.7838, distant resistance is at 1.8000.

Oscillators are mixed.

NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish

Dollar/Swiss franc

Dollar/Swiss franc made a bearish reversal on Wednesday, as it hit a one-week low. The downside is favored in the short term.

Immediate support is at 1.1210. Below 1.1140, support is seen at 1.1085. Good support follows at 1.097.

Initial resistance is at 1.1325. Above 1.1390, distant resistance comes at 1.1490

Oscillators are declining.

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

Cornelius Luca
Global Forex Trading
http://www.gftforex.com

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