Forex Market Commentary for June 29, 2007

[GFTforex]

GFT Daily Forex Market Commentary
The dollar collapsed on Friday amid light volume at the end of the second quarter. It had risen only briefly on Thursday afternoon after the Federal Reserve kept its benchmark interest rate at 5.25 percent and said inflation is a risk to the economy.
The pound advanced to a nearly two-month high on strong UK housing data, but dollar/yen and dollar/Swiss franc edged up, as expected. Cross trading remains the name of the game on the last day of the second quarter. The US calendar includes reports on personal income, Chicago PMI and the University of Michigan market sentiment.

Euro/dollar
Euro/dollar surged on Friday but the medium-term outlook is mixed.

Immediate resistance is seen at 1.3525. A close above 1.3553 would signal another aggressive attack on the upside to 1.3610.
Initial support is at 1.3480. Below the 1.3413 level there is support at 1.3373.
Oscillators are rising.

NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Dollar/yen
Dollar/yen edged up, as expected. It should attempt to extend its recovery today as well.
Immediate resistance is at 123.55. Above it, strong resistance is seen from a 50-point pivot at 124.00 that targets 123.50 and 124.50.
Initial support is at 123.00. Key support comes at 122.50 from another 50-point pivot, which targets 122.00 and 123.00.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Sterling/dollar
Sterling/dollar climbed to a near two-month high and this is in line with the bullish medium-term outlook. The close above the 2.0000 mark suggests mild strength for today.
Initial resistance comes at 2.0073. Distant resistance remains between 2.0131 and 2.0151.
Immediate support is seen at 2.0010. Next level is 1.9976. If 1.9929 breaks on a closing basis, then look for a further decline to the support at 1.9880. That’s very unlikely.

Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

Dollar/Swiss franc
Dollar/Swiss franc edged up as expected on Thursday but fell to a three-week low on Friday. It should attempt to fall further from here.
The initial support is at 1.2230. Strong support follows at 1.2175.

Above the resistance at 1.2290 there still is good resistance at 1.2340.
Oscillators are falling.

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