GFT Daily Market Commentary

[GFTforex]

Forex Market Commentary for May 22, 2008 by Cornelius LucaGFT Daily Market Commentary

The dollar suffered on Wednesday as well amid another debilitating surge in oil prices and following Fed’s minutes, which basically spelled stagflation. My model remains short dollars across the board, and this makes sense. But the US currency should attempt a mild recovery first.

Euro/dollar

The euro/dollar rallied further to its highest level since late April, in part following an expected gain in the Ifo report, and the interim inversed head-and-shoulders looks even better. My model remains long and the top of a rising channel was blown off. Following some profit taking, the upmove should resume.

Initial resistance is now seen at 1.5827. Above 1.5865, euro/dollar has distant resistance at 1.6020.

Immediate support is now seen at 1.5740. The next level is 1.5685. This is followed by 1.5460.
Oscillators are bullish.

NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen struggled lower after the Gann pivot at 103-40 proved to be quite sticky. My model remains short and the downside remains favored. But a break below the rising trendline is needed to confirm further weakness.

Initial support is at 102.90. The next big level is 102.30 from another 50-point pivot, which targets 101.80 and 102.80. Distant support is at 101.25 from a 50-point pivot, which targets 100.75 and 101.75.

Immediate resistance is now at 103.40 from a 50-point pivot, which targets 102.90 and 103.90. Strong, but distant, resistance remains at 104.50 from a 50-point pivot, which targets 104.00 and 105.00.
Oscillators are declining.

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

Sterling/dollar

Sterling/dollar paused in an inside range after surging to a near two-week high a say earlier. My model remains long and the interim inversed head-and-shoulders pattern is in place. But an initial decline is likely.

Initial resistance now is still seen at 1.9719. Above 1.9766, there is further resistance at 1.9880. Distant resistance is at 2.0030.

Immediate support remains at 1.9645. This is followed by 1.9585. Only a break below 1.9495 jeopardized the cable’s recovery.

Oscillators are rising.

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

Dollar/Swiss franc

Dollar/Swiss collapsed further to a four-week low and my model remains short. The immediate outlook is bearish after forming a double top that targets 1.0130 and after the rising medium-term channel was pierced on a closing basis.

Immediate support is now seen at 1.0200. This is followed by 1.0130 and 1.0105. Distant support is now pegged at .9877.
Initial resistance now comes at 1.0344. If 1.0390 gives way, expect a test of the distant resistance at .1.0623.
Oscillators are sliding.

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