NEWS / Foreign Debt

Daily Forex Market Commentary for November 14, 2006

Daily Forex Market Commentary for November 14, 2006
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT


The dollar made the expected recovery on Monday and should attempt to repeat the same thing against the European currencies, while slipping against the yen. But Tuesday will see the release of the US retail and PPI report, so don't forgert that the medium-term outlook is negative.

Euro/dollar
One day after peaking at a 2 ??-month high of 1.2899, euro/dollar fell sharply on Monday and gave up bearly half of the rally between November 3 and 10. This decline was in line with expectations and should persist today as well, provided that 1.2790 gives way. The medium-term outlook remains positive.

Below the significant 1.2790 level, the pair has support at 1.2765 and 1.2730. Strong support follows at 1.2700.

Above 1.2847, resistance is stacked at 1.2900. 1.2938 and 1.2955. Next strong resistance is naturally pegged at 1.3000.

Oscillators are mixed.

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

Dollar/yen
Dollar/yen reversed from a 10-day low of 117.12 on Monday but is not going anywhere fast. The pair remains at the bottom of its medium-term uptrend and only a close below 117.10 signals the break of the trendline support. Given the strong GDP for the third quarter and the upward revision of the second quarter, there is a chance of this happening.

Below 117.10, dollar/yen then has support at 116.85 by a 50-point pivot, which targets 116.35 and 117.35.

Initial resistance is at 117.90. Strong resistance remains at 118.25 from another 50-point pivot that targets 117.75 and 118.75. Strong resistance is at 119.86

Oscillators are mixed.

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

Sterling/dollar
One day after peaking at a seven-month high of 1.9176, sterling/dollar fell to give up about 38.2% of the rally between October 24 and November 10. While further mixed to lower trading is favored on Tuesday, the medium-term outlook remains positive.

Initial support comes at 1.9000. Next level is 1.8960. It would take a close below 1.8900 to confirm a sustained decline.

Immediate resistance is at 1.9065. That's followed by 1.9100 and 1.9176. Above this level Cable would be on its way to 1.9275, but this is less likely.

Oscillators are mixed.

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

Dollar/Swiss franc
Dollar/Swiss franc reversed easrly losses and closed higher on Monday, as expected. The pair should attempted advancing further today, but the medium-term outlook remains negative.

Initial resistance is between 1.2490 and 1.2500. Next levels are at 1.2580 and 1.2620. Further resistance is pegged at 1.2700.

Immediate support is at 1.2405. Further down there is 1.2360. Below 1.2345, support now lies at 1.2250.

Oscillators are mixed.

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

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