[B]Forex Market Commentary for July 9, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar recouped losses versus the majors and even rallied against the pound after the holiday with help from strong US data. The Institute for Supply Management’s services index rose to 60.7 in June from 59.7 in May. The pound failed to advance after the BoE met the market expectations and increased the bank rate by a quarter-point to 5.75 percent. Friday will see the release of the non-farm payrolls, so take your cues from the report. The bias is on the upside.
Euro/dollar
Euro/dollar fell from a two-month high and the severely overbought pair shows signs of exhaustion. It needs a push lower to chuck its medium-term uptrend – perhaps the US unemployment can di the trick.
Initial support is at 1.3575. Next levels are 1.3505, 1.3460 and 1.3440.
Immediate resistance is seen at 1.3665. A break above the further level at 1.3685 would signal another aggressive attack on the upside to 1.3750. This is unlikely. Distant resistance looms at 1.3810.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen struggled further up, as expected, after sinking to a nearly three-week low on Monday. It should attempt to rally today as well.
Immediate resistance is at 123.15. Next level is 123.55. Above it, strong resistance is seen from a 50-point pivot at 124.00 that targets 123.50 and 124.50.
Key support remains at 122.50 from another 50-point pivot, which targets 122.00 and 123.00.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar sank to a three-day low on Thursday after coining a marginally new 26-year high on Tuesday. The expected rate hike didn’t help it and the massively overbought pair stands at the edge of the abyss (let’s call it trendline).
Immediate support is seen at 2.0090 and then at 2.070. Only a break below 2.0020 on a closing basis would signal the likely end of the upmove, but this is unlikely. In that case you’d have to look for the further support at 1.9910.
Initial resistance is at 2.0150. Above 2.0195, resistance is still seen at 2.0250 and 2.0315.
Oscillators are rising.
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss franc recovered early losses but needs to exit the range of July 2. The medium-term outlook is mixed.
Initial resistance is at 1.2205. Next level is 1.2250. Distant resistance is at 1.2310.
Immediate support is still seen at 1.2100. Strong supports follow soon at 1.2065 and 1.2030.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed