Forex Market Commentary for October 20, 2006

The short-term overbought dollar fell broadly on Thursday and the weak Philly Fed report accelerated the slide. The weakness should last today as well.


Euro/dollar

Euro/dollar finally exploded out last Friday's range on its way to a near two-week high. It should see more strength today, but the pace of the rally should decelerate.
Above 1.2650, the euro/dollar has resistance at 1.2715. Pivotal resistance follows at 1.2765.
Initial support is at 1.2575. Next support is at 1.2550. Below 1.2500, support now comes at 1.2465.

Oscillators are declining.

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

Dollar/yen

Dollar/yen fell sharply on Thursday after failing its attempt of recovery. More weakness is seen for today
Below 117.75, dollar/yen has support at 117.15. Distant support is at 116.06.
Initial resistance is at 118.25 by another 50-point pivot that targets 117.75 and 118.75. Above 119.00, the key level resistance remains at 119.65 from a 50-point pivot that targets 119.15 and 120.15. Above 120.15, resistance is seen at 120.50. Further resistance is the pegged at 121.05 from another 50-point pivot that targets 120.55 and 121.55.
Oscillators are rising.

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


Sterling/dollar

Sterling/dollar rallied to a 13-day high on Thursday and the strength shoudl persist.
Initial resistance is seen at 1.8860. Above 1.8895, resistance comes at 1.8955.
Immediate support is at 1.8750. That is followed by 1.8700 and 1.8660.
Oscillators are declining.

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



Dollar/Swiss franc

Dollar/Swiss fell sharply on Thursday and should see more weakness today.

Below 1.2545, dollar/Swiss franc has support at 1.2500. Distant support is at 1.2405.
Initial resistance is at 1.2590. Above 1.2637, the pair has resistance at 1.2700.
Oscillators are rising.

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