NEWS / Foreign Debt

Daily Forex Market Commentary for September 1, 2006

GFT Daily Forex Market Commentary for September 1, 2006
by: Cornelius Luca, Currencies Analyst, GFT


The dollar was all over the place on Thursday as well, reversing early losses to close slightly higher against the majors and coining a new high versus the yen. All eyes will be on the non-farm payrolls report, which should produce its normal share of high volatility and spikes. It??™s the last day of typical vacation and before z long weekend, so trading will be choppy and light. Trade only if you have to.

Euro/dollar
Euro/dollar fell from a nine-day high of 1.2878 to close lower on Thursday. Choppy trading should persist today as well after the release of the US data.

Initial resistance is remains at 1.2855. That is still followed by 1.2878 and 1.2900. Above 1.2938, the pair has resistance from a pivotal high at 1.2979.

Immediate support is at 1.2784. That is followed by 1.2748. Below the1.2715 level, strong support remains between 1.2690 and 1.2700. Distant support is at 1.2655.

Oscillators are mixed.

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

Dollar/yen
Dollar/yen reversed early losses and broke out of an inside range on its way to a 1 ??-month high of 117.46. This should help put on new positions, but probably yen on the crosses.

Initial resistance is at 117.75. Good resistance is still seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75.

The pair has initial support at 116.85 from another 50-point pivot, which targets 116.35 and 117.35. Below 115.80, good support remains at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

Sterling/dollar
The sterling/dollar rallied again on Thursday and reached a new near three-week high of 1.9090. The rally is overdone but the pullback, if any, should remain mild.

Above 1.9090, resistance remains at 1.9145.

Initial support is still seen at 1.9015. The next levels are 1.8955 and 1.8915. These are followed by 1.8865. Distant support is at 1.8780.

Oscillators are edging higher.

NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss franc reversed losses from 1.2224 to close slightly higher on Thursday.

The pair still has resistance at 1.2345. Strong resistance follows at 1.2375 and at 1.2420. Distant resistance follows at 1.2510.

Below the pivotal support between 1.2268 and 1.2255, distant support remains at 1.2182.

Oscillators are edging lower.

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

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