Forex Technical Analysis 28 September 2007


Daily Forex Market Commentary

The dollar was mixed on Thursday, despite the weak US housing data. It fell against the euro and the pound while falling versus the yen and the franc. Thus, the weakness in yen against the euro, Aussie and Kiwi continued. The dollar remains oversold, but buy it only on a stop-loss basis. Watch out for the consumer spending, Chicago PMI and the University of Michigan reports.


Euro/dollar

Once again, the euro/dollar slipped from a new all-time high the day on Thursday but closed little changed. The overbought pair should see some more weakness on profit taking. Again, sell only on a stop loss basis.

Initial support is at 1.4104. The next level is 1.4060. Below 1.4025, euro/dollar still has support at 1.3980. Distant support is at 1.3895.

Above 1.4189, strong resistance remains at 1.4260. Next resistance is pegged at 1.4305.

Oscillators are rising.

NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish


Dollar/yen

Dollar/yen edged up to a one-week high on Thursday but remained in an inside range. Long euro/yen and carry trades remain favored, but today should see choppy trading. The key level is 115.50 from another 50-point pivot, which targets 115.00 and 116.00

Resistance is seen at 116.00. The next big level is 116.85 from another 50-point pivot that target: 116.35 and 117.35.

Below 115.00, support comes at 114.70. Strong support is at 114.20 from another 50-point pivot that targets 113.70 and 114.70.

Oscillators are rising.

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


Sterling/dollar

Good homes data helped sterling/dollar rally and break out of an inside range on Thursday. Choppy and directionless trading should continue as the pair trades near the top of a symmetrical triangle

Immediate support is seen at 2.0200. Below the strong 2.0150 level there is support at 2.0090. A break below the 2.0055 level would signal a retest of the 2.0000 mark.

Strong resistance remains at 2.0280. If this level gives way, look for a test of the pivotal high at 2.0366. Further resistance looms at 2.0436.

Oscillators are rising.

NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Mixed with upside bias
LONG-TERM: Bullish


Dollar/Swiss franc

Dollar/Swiss recovered on Thursday as well. The pair remains oversold, and a bit more strength is likely today.

Initial resistance is still in place at 1.1745. Strong resistance follows at 1.1770. This level is followed by 1.1850. Distant resistance is at 1.1935.

Immediate support is at 1.1665. Below 1.1638, there is some support at 1.1610. Next level is 1.1570. Distant support follows at 1.1495.

Oscillators are declining.

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

By: Cornelius Luca
Global Forex Trading

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