GFT Daily Market Commentary
The dollar fell across the board on Wednesday, as the last minute government bailout of the key financial player AIG failed to support the equity markets. Simply put, who is next to go? Wa Mu, other top investment banks? Rumors made rounds of concerted rates by Thursday morning, and they added to the selling pressure. Commodities rallied sharply on the day, part because of the dollar weakness and part because of profit taking on oil, which had tested strong support at $90/barrel on Tuesday. The housing starts and building permits for August were weak, but the number was made more horrible by a change in code. Beside the weekly jobless report, Thursday will see the release of the leading indicators report for August and of the Philly Fed survey for September. These two reports could be interesting. The dollar should attempt to consolidate today, but the risk is on the downside.
Euro/dollar
Euro/dollar rallied on Wednesday, as expected, and my model remains long. It should attempt to pad its gains today.
Initial resistance is at 1.4400. Above 1.4482, resistance is still seen at 1.4545. Above 1.4625, resistance is at 1.4810.
Immediate support comes at 1.4270. The next strong level remains at 1.4145. Below 1.4088, the low on Monday, support is still seen at 1.4004. A pivot low is at 1.3883.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Dollar/yen
Dollar/yen failed to recover on cross trading and fell amid general weakness. My model remains short and the bias is on the downside.
Below the 104.50 by a 50-point pivot, which targets 104.00 and 105.00, there is a pivot low at 103.56. Distant support is at 102.40.
Immediate resistance is now 105.60 from a 50-point pivot that targets 105.10 and 106.10 106.75 from a 50-point pivot, which targets 106.25 and 107.25. Distant resistance remains at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied on Wednesday more than I expected. The short term is at least slightly bullish.
Immediate resistance is at 1.8190. Above the strong level at 1.8280, distant resistance is at 1.8470 and 1.8505.
Initial support is at 1.8035. The next level to watch is 1.7960. Below the strong level at 1.7780, support remains at 1.7708.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss franc fell aggressively during the down day expected for Thursday. More pressure is likely here.
Below 1.0950, support is pegged at 1.0885. This is followed by 1.0844. Distant support is at 1.0715.
Initial resistance comes at 1.1200. This is followed by 1.1270 and 1.1360.
Oscillators are falling.
NEAR-TERM: Slightly lower
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
