NEWS / Foreign Exchange

Daily Forex Market Commentary for November 9, 2006

GFT Daily Forex Market Commentary for November 9, 2006
Daily Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT


The dollar traded sideways on the day after the US midterm elections in which Democrats gained control of the House of Representatives. The US Trade report is due on Thursday; while this should be a useless report, given the structure of our commerce, this reading may be relatively strong because the decline in oil prices in September. This should briefly support the dollar. Careful though, the pound should advance because the Bank of England should hike rates.

Euro/dollar
Euro/dollar traded sideways within an inside range after surging to a six-week high of 1.2818 a day earlier. It shoudl now head lower, but only a break below 1.2735 confirms this.

Below 1.2735, support follows at 1.2695. If this level breaks, then expect the euro/dollar to challenge 1.2625. Distant support is at 1.2530.

Initial resistance is at 1.2780. Above 1.2818, resistance is at 1.2873. Above this level, strong resistance is then seen at 1.2940 and 1.3010.

Oscillators are mixed.

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

Dollar/yen
Dollar/yen traded sieways on Wednesday to close virtually unchanged. Expect more of the same today.

Below 117.45, dollar/yen still has distant support is at 116.85 by a 50-point pivot, which targets 116.35 and 117.35.

Above 118.00, there is resistance from the the key 118.25 50-point pivot that targets 117.75 and 118.75. Strong resistance remains 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.

Oscillators are rising.

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

Sterling/dollar
Sterling/dollar traded sideways in an inside range and closed vitually unchanged on Wednesday. It should attempt to challenge the high price of the uptrend because the Bank of England should hike rates.

Above 1.9121 there is strong resistance at 1.9205. Distant resistance is seen at 1.9222.

Immediate support is at 1.9000. That is followed by a pivot low at 1.8950. Further support is pegged at 1.8910. That is followed by 1.8850.

Oscillators are mixed.

NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss consolidate on Wednesday, as expected, remaining in an inside range and closing virtually unchanged.

Below 1.2470, dollar/Swiss franc retains strong support at 1.2438. Distant support now comes at 1.2405.

Initial resistance is at 1.2545. Above 1.2580, the pair has resistance at 1.2640. Distant resistance is at 1.2708 from a pivotal high.

Oscillators are mixed.

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

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