[B]Forex Market Commentary for March 6, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar followed divergent paths on Monday as well, sinking further against the yen, and rallying versus the European currencies. Unwinding of medium-term carry trades continued and this spilled over in the other crosses against the yen, This pattern should persist today as well, but the process is overdue, so a reaction should be see probably later in the day.
Euro/dollar collapsed to its lowest level since Valentine’s Day and hit 1.3071 before bouncing. It should try to dig deeper still today, but only break below this level would warrant further weakness.
The combination of two Fibos provides strong and immediate support is at 1.3070. Next supports loom at 1.3030 and 1.3000. Distant support is seen at 1.2940.
Initial resistance is between 1.3130 and 1.3140. Above 1.3175, the pair has strong resistance from a pivotal top at 1.3258. Further resistance looms at 1.3325 and 1.3367.
Oscillators are falling.
NEAR-TERM: Mixed with negative bias
MEDIUM-TERM: Mixed with bullish bias
Dollar/yen fell to a new three-month low on Monday and the weakness should persist overall amid long liquidation of sterling and other currencies against the yen.
Immediate support is at 115.50 from a 50-point pivot that targets 115.00 and 116.00. The next level is at 114.20 from another 50-point pivot, which targets 113.70 and 114.70. There is a pivotal low at 113.43. Distant support is pegged at 112.90.
Initial resistance is at 116.00. Strong resistance is at 116.85, from a 50-point pivot, which targets 116.35 and 117.35
The pound too another sharp blow on Monday on long liquidation of sterling/yen and the selling pressure should continue. The pair triggered a double top formation, which ultimately targets the 1.8720.
With the intermediate pivot low in the 1.9250 area out of the way, the pair should re-test its low at 1.9179. Support then follows at 1.9110. The next level of support now lies at 1.9050, which is the 61.8% Fibonacci retracement level of the uptrend between October and January. Distant support is at 1.8890.
Initial resistance is at 1.9265. Above 1.9340 the pair has distant resistance at 1.9400.
Oscillators are falling.
Dollar/Swiss franc reversed early losses that took it to a new low for the downtrend to close higher on Monday, as expected.
Immediate resistance remains at 1.2200. Above 1.2255, resistance remains at 1.2305. Next level is 1.2370.
Initial support is at 1.2170. Below this strong level, support is still seen at 1.2100. Strong support then follows at 1.2030. Distant support is at 1.1880.
Oscillators are mixed.
NEAR-TERM: Mixed with bullish bias