NEWS / Macroeconomic Stories

Daily Forex Market Commentary for October 24, 2006

Forex Market Commentary for October 24, 2006
GFT Daily Forex Market Commentary by Cornelius Luca


The dollar made an explosive and unexpected rally on Monday, which suggests that some large position was set. The slide erased Thursday's losses but is nt that clear the rally may continue. If you are long, hold the postion with a tight step because the dollar is mire likely to trade sideways today.

Euro/dollar
Euro/dollar made an aaggressive decline on Monday that took the market by surprise. Howver, only a break below 1.2520 would warrant further losses.

If 1.2520 snaps, expect the euro/dollar to challenge 1.2490. That could lead to a test of the pivotal low at 1.2460.

Initial resistance is at 1.2580. Above 1.2650, resistance is seen at 1.2710. Strong resistance is then seen at 1.2765, but the pair should not challenge it.

Oscillators are declining.

NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/yen
Dollar/yen surged to a one-week high on Monday and if it can hold its own today, it will approach significant high levels.

Strong resistance is at 119.65 from a 50-point pivot that targets 119.15 and 120.15. If the defense of the KO options at 120 is somehow surpassed, expect heavy hunting for stop-loss orders. Above 120.15, resistance is seen at 120.50.

Below 119.00, dollar/yen has support at 118.25 by another 50-point pivot that targets 117.75 and 118.75. Distant support is at 116.85 by a 50-point pivot, which targets 116.35 and 117.35

Oscillators are rising.

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

Sterling/dollar
Sterling/dollar fell hard enough on Monday to erase Friday's gains and some of Thursday's as well. It trimmed some of the losses by the close, which suggests at least some consolidation today.

Immediate support is at 1.8685. That is followed by 1.8660 and 1.8605. Distant support is at 1.8514.

Above 1.8755, resistance is now seen at 1.8795. A pivtoal level lies at 1.8858.

Oscillators are declining.

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

Dollar/Swiss franc
Dollar/Swiss rallied sharply and unexpectely on Monday to erase most of the losses made on Thursday. It would take a break above 1.2700 to convince us that this upmove has legs.

Above 1.2700, the pair has a pivotal high at 1.2770. Further resistance is at 1.2818.

Below 1.2630, dollar/Swiss franc has support at 1.2582. Only a break below 1.2525 would signal aggressive weakness and a test of 1.2470.

Oscillators are mixed

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

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