GFT Daily Market Commentary

Rumors of a possible default by Russia or of collapse of big Japanese, US or European institutional investors triggered an explosive rally if the dollar the European currencies and an aggressive slide against the yen on Friday. The markets relaxed a little later in the day, but panic is driving the markets and liquidity continues to suffer. Expect more of the same and the market is expecting concerted rate cuts as early as today. The US economic agenda will open on Monday with the release of the New Home Sales report for September - it’s hard to expect anything positive here.
 
 
 

Euro/dollar

Euro/dollar remains weak after falling on Friday to a two-year low. The medium-term bias remains bearish. 
 
Immediate support is between 1.2490 and 1.2500. Distant support is at 1.2375.  
 
Above 1.2730, resistance is seen at 1.2935. Only a break above 1.3260 would signal a sustained recovery of euro/dollar.

Oscillators are bearish.

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

Dollar/yen

Dollar/yen collapsed to a ten-year low in wild trading on Friday amid rumors of sovereign default.  The medium-term outlook remains bearish even after the pair already reached the target of a head-and-shoulders formation. 
 
Good support is at 92.25.  The next level is Friday’s low of 90.94. 

Immediate resistance is at 95.75. Above 98.13, resistance looms at 100.50.

Oscillators are falling.

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

Sterling/dollar

Sterling/dollar plunged further to a six-year low and my model remains short.  The downside is still favored, as the medium-term outlook remains bearish. 
 
Immediate support is at 1.5590. The next level is at 1.5269. 
 
Initial resistance is at 1.6040. Distant resistance looms at 1.6285.

Oscillators are falling.

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

Dollar/Swiss franc

Dollar/Swiss reversed early losses and surged to a one-year high. My model remains long.  The medium-term risk remains on the upside.
 
Initial resistance is at 1.1767. The next level is between 1.1867 and 1.1873. 
 
Immediate support is still seen between 1.1585 and 1.1595.  The next level is 1.1410. Distant support comes at 1.1205. 
 
Oscillators are rising.

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