GFT Daily Market Commentary

The dollar paired losses versus the European currencies and managed to close higher versus the lower yielding franc and yen. Trading remains impaired by low liquidity and the end of month on Friday won’t improve conditions.  The contraction for third quarter GDP was not as bad as expected, but it confirms the start of a debilitating recession. The dollar remains in a medium-term uptrend against the European currencies and a downtrend versus the yen, but this pattern will be more visible staring November. Bon chance!
 
 

Euro/dollar

The euro/dollar fell from an 8-day high after a 38.2% Fibonacci retracement level and the 20-day moving average held, and closed little changed on Thursday. The medium-term bias remains bearish. 
 
Immediate support is at 1.2805. Below 1.2695, distant support is now at 1.2335.   

 
Initial resistance is at 1.3060. Above 1.3200, resistance is now seen at 1.3260. Distant resistance is at 1.3570 would signal a sustained recovery of euro/dollar.

Oscillators are bullish.

NEAR-TERM: Mixed with significant downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish

Dollar/yen

Dollar/yen climbed up on Thursday, but got stuck in an inside range.   My model remains long, but the medium-term outlook remains bearish.  
 
Immediate resistance is at 99.70. Above 100.50, resistance is now seen at 103.05.

Initial support is at 97.25.  The next level is 95.70.  Below 94.40 there is Friday’s low of 90.94. 

Oscillators are mixed.

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

Sterling/dollar

Sterling/dollar marched higher on Thursday and my model remains long.  The upside is limited, as the medium-term outlook remains bearish. 
 
Initial resistance remains at 1.6635. The next level is 1.6760. Distant resistance looms at 1.6940.

Immediate support is still seen at 1.6355. The next level is at 1.6090. Below 1.5735, distant support is at 1.5270 from a pivot low.
 
Oscillators are rising.

NEAR-TERM: Mixed with significant downside risk
MEDIUM-TERM: Bearish
LONG-TERM: Bearish

Dollar/Swiss franc

Dollar/Swiss reversed from a three-week low to close higher on Thursday. The medium-term risk remains on the upside.
 
Initial resistance is at 1.1420. Above 1.1500, the next level is 1.1767. This is followed by the area between 1.1867 and 1.1873. 
 
Immediate support is at 1.1310.  The next level is 1.1180. Distant support comes at 1.1055. 

 
Oscillators are mixed.

 
NEAR-TERM: Slightly bullish 
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

GFT Daily Market Commentary

An early rally in the US indices and ongoing profit taking in FX triggered another massive slide on the dollar against the European and the commodity currencies, and a dollar/yen rally.  Once the Fed met the market expectations and cut rates by 50 bps to 1%, stocks fell.  The pattern seen during the past two days is in its final stages, so today the market should be even choppier than usual.  
 

Euro/dollar

The euro/dollar rallied further after forming a bullish reversal a day earlier and my model remains long. The 20-day moving average held the upside, and only a clear break above it would turn the outlook positive. Until then, the medium-term bias remains bearish. 
 
Above 1.3200, resistance is now seen at 1.3260. Distant resistance is at 1.3570 would signal a sustained recovery of euro/dollar.

Immediate support is at 1.3060. The next level is 1.2907. Below 1.2695, distant support is now at 1.2335.  
 
Oscillators are bullish.

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

Dollar/yen

Dollar/yen rallied to a one-week high early Tuesday but then reversed gains, as the 20-day moving average held.  My model remains long, but the medium-term outlook remains bearish.  I wouldn’t be too long here.
 
Immediate resistance is at 98.45. The next level is 99.70. Above 100.50, resistance is now seen at 103.05.

Initial support remains at 96.75.  The next level is 95.70.  Below 94.40 there is Friday’s low of 90.94. 

Oscillators are mixed.

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

Sterling/dollar

Sterling/dollar surged further on Wednesday and my model remains long.  The upside is limited, as the medium-term outlook remains bearish. 
 
Initial resistance is at 1.6635. The next level is 1.6760. Distant resistance looms at 1.6940.

Immediate support is at 1.6365. The next level is at 1.6090. Below 1.5735, distant support is at 1.5270 from a pivot low.
 
Oscillators are rising.

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

Dollar/Swiss franc

Dollar/Swiss caught up with the other the European currencies and collapsed on Wednesday. In the short term the downside is favored, but the medium-term risk remains on the upside.
 
Immediate support is at 1.1260.  The next level is 1.1180. Distant support comes at 1.1055. 

Initial resistance is at 1.1400. Above 1.1500, the next level is 1.1767. This is followed by the area between 1.1867 and 1.1873. 
 
Oscillators are mixed.

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

GFT Daily Market Commentary

A massive rally in the US indices, signs of thawing of the credit markets and expectations for a large rate cut today made for a massive slide on the dollar against the European and the commodity currencies vis-à-vis a dollar/yen rally.  None of that is going to last for long, so let’s all enjoy it, at least until 2:15 PM today, when the FOMC will announce the size of the rate cut.
  
 

Euro/dollar

The euro/dollar reversed from a new low of its downtrend and formed a bullish reversal. My model went long. That was nice, especially for an oversold pair, but this reversal has no legs. The medium-term bias remains bearish. 
 
Above 1.2840, resistance is seen at 1.3040. Only a break above 1.3260 would signal a sustained recovery of euro/dollar.

Immediate support is at 1.2645. The next level is 1.2555. Below 1.2445, distant support is now at 1.2335.  
 
Oscillators are bearish.

NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish

Dollar/yen

Dollar/yen made its largest one-day reversal in a quarter century and my model went long.   But the 20-day moving average held and the medium-term outlook remains bearish.  I like selling into rallies from here.
 
Initial support is seen now at 96.75.  The next level is 95.70.  Below 94.40 there is Friday’s low of 90.94. 

Immediate resistance is at 98.45. The next level is 99.70. Above 100.50, resistance is now seen at 103.05.

Oscillators are mixed.

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

Sterling/dollar

Sterling/dollar rallied sharply on Tuesday and my model went long. But the pair remains in an inside range.  Thus, the downside is still favored, as the medium-term outlook remains bearish. 
 
Initial resistance is at 1.6112. The next level is 1.6285. Distant resistance looms at 1.6540.

Immediate support is at 1.5815. The next level is at 1.5590. Distant support is at 1.5270 from a pivot low.
 
Oscillators are mixed.

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

Dollar/Swiss franc

Dollar/Swiss was the exception to the rule and lacked much direction. It should edge higher soon, as the medium-term risk remains on the upside.
 
Immediate support is still seen at 1.1520 and 1.1485.  The next level is 1.1410. Distant support comes at 1.1205. 
 
Initial resistance is at 1.1600. The next level is 1.1767. This is followed by the area between 1.1867 and 1.1873. 
 
Oscillators are rising.

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