NEWS / Fiscal Policy, Budget

Daily Forex Market Commentary for October 9, 2006

GFT Daily Forex Market Commentary for October 9, 2006
Forex Market Commentary by Cornelius Luca


The dollar rallied sharply across the board on Friday after the non-farm payrolls turned out to be much better than the horrible headline report. Dollar bears were squeezed out. After a decline on Monday, the dollar should attempt another rally. With Japan, the US and Canada closed on Monday, trading should be light.

Euro/dollar
Euro/dollar fell to a 2 ??-month low of 1.2571 on Friday. Following a brief recovery on Monday, but the decline should continue.

Below 1.2580 support comes at 1.2560; this nearby level is very important and won??™t give up easily.

Immediate resistance is now seen at 1.2645. Next level is at 1.2730.

Oscillators are declining.

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

Dollar/yen
Dollar/yen rallied to a near seven-month high of 119.09 on Friday. It??™s approaching the top of its rising channel and only a close above 119.30 would warrant further strength.

Above 119.30, resistance is nearby at 119.65 from a 50-point pivot that targets 119.15 and 120.15. The next level is 120.50.

Dollar/yen has initial support at 118.45. That??™s followed at 118.25 by another 50-point pivot that targets 117.75 and 118.75.

Oscillators are rising.

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

Sterling/dollar
Sterling/dollar reversed early gains and closed well down on Friday. The decline meant that it closed the week unchanged. The outlook remains mixed. There is more room on the downside, but don??™t expect an aggressive decline.

Immediate support is at 1.8665. That??™s followed by two pivots at 1.8635 and 1.8605.

Initial resistance is seen between 1.8755 and 1.8770. Above 1.8800 resistance comes at 1.8860 and 1.8910.
Oscillators are mixed.

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

Dollar/Swiss franc
Dollar/Swiss surged to a 5 ??-month high of 1.2631 on Friday. This pair is only half way through the rising channel, so it has more room on the upside.

Above 1.2631, the pair has resistance at 1.2708 and at 1.2735. Next level is at 1.2800.

Below 1.2560, dollar/Swiss franc has support at 1.2425. The next level comes at 1.2360.

Oscillators are mixed.

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


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