Forex Market Commentary for May 29, 2007 by Cornelius Luca

[B]GFT Daily Forex Market Commentary[/B]

GFT Daily Forex Market Commentary

The soft report on existing home sales hurt the dollar versus the European currencies on Friday. Dollar/yen slipped early on Friday as well amid profit taking on carry trades, but news that the belligerent North Korea had a missile test helped it reverse the initial losses. The US currency remains overbought in the short term, so it should correct lower against the yen while advancing versus the European currencies. Time to trade crosses.


Euro/dollar treaded water on Friday but should decline today.
Again, the pair must dig below 1.3410 to warrant more weakness. If this level breaks, look for a test of the support at 1.3375. Below this the Fibonacci retracement level there is support at 1.3275.

If 1.3410 holds, look for a rally to 1.3530. A close above 1.3545 would signal another attack on the upside to 1.3610.
Oscillators are declining.

LONG-TERM: Bullish


Dollar/yen slipped early Tuesday after nailing a one-week high of 121.89 on Friday. The medium-term outlook remains bullish.
Key support level this week is at 121.05 from a 50-point pivot, which targets 120.55 and 121.55. Below 120.00, strong support comes at 119.65 from another 50-point pivot that targets 119.15 and 120.15.
Above 121.89 there still is resistance at 122.18. Next resistance comes at 122.50 from another 50-point pivot.

Oscillators are rising.

NEAR-TERM: Mixed with bearish bias
LONG-TERM: Bullish


Sterling/dollar traded sideways in a tight range on Friday and Monday as well. It failed to break the top of its declining channel, so the pound should struggle lower. Short-term positions are long, so some long liquidation is likely.

Initial support is at 1.9790. Below 1.9715 there still is good support at 1.9655.

Immediate resistance is at 1.9870. Strong resistance is still seen at 1.9900 from the top of its declining channel. If this level breaks, then look for a rebound to 1.9960. Distant resistance is at 2.0000.
Oscillators are mixed.

LONG-TERM: Bullish

Dollar/Swiss franc

Dollar/Swiss franc consolidated on Friday, as expected. The medium-term outlook remains positive.

Above the resistance at 1.2332 there is good resistance at 1.2370. Next target is 1.2437. Distant resistance looms at 1.2554.

Immediate support is at 1.2775. This is followed by 1.2240 and 1.2210. Below 1.2170, distant levels are 1.2095 and 1.2065.
Oscillators are rising.

LONG-TERM: Slightly bearish