NEWS / Central Banks

Daily Forex Market Commentary for September 12, 2006

GFT Daily Forex Market Commentary by Cornelius Luca
Forex Market Commentary for September 12, 2006


The dollar was all over the place on Monday amid demand for crosses against the yen: up against the yen, down versus the euro and the franc, and flat against the pound. With the US trade deficit set to show another abysmal reading, the US currency should be under pressure. Thank you for all the readers who participated in my presentation in Las Vegas!

Euro/dollar
Euro/dollar reversed from a marginally new 1 ??-month low to close up on Monday. The pair reached critical support at 1.2655 and only a close below this level would signal further weakness. The first bias should be on the upside first.

Immediate resistance is now pegged at 1.2745. Above 1.2815 there is resistance at 1.2850.

Initial support is seen at 1.2670. That followed by the area between 1.2631 and 1.2639. Further support looms at 1.2555.

Oscillators are declining.

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

Dollar/yen
Dollar/yen surged to its highest level since July 19 on relief the central bankers couldn??™t talk the yen up; next chance will be next week. The bias is mildly bullish.

Above 117.80, good resistance remains at 118.25 from a 50-point pivot that targets 117.75 and 118.75.

The pair has initial support at 117.30. Strong support follows 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 rising.

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

Sterling/dollar
Sterling/dollar recovered from a new five-week low to close virtually unchanged on Monday. The pair should remain under general selling pressure after triggering a double top formation that targets 1.8380. Following a brief bounce, the market should attempt pressing the cable further down.

Initial resistance is still seen at 1.8720. Above 1.8780 there is resistance at 1.8870.

Immediate support is now pegged nearby at 1.8600. That??™s followed by strong support only at 1.8555.

Oscillators are declining.

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

Dollar/Swiss franc
Dollar/Swiss experienced choppy trading and closed with small losses on profit taking. The overall picture remains bullish.

Below 1.2410 there is support at 1.2360. The next floor is pegged at 1.2280.

Initial resistance is at 1.2470 and that??™s followed by 1.2516. Above 1.2540, dollar/Swiss franc has resistance at 1.2580. There is a pivotal high at 1.2594.

Oscillators are rising.

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

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