[B]Forex Market Commentary for March 14, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar managed to pare some of its early losses on Tuesday triggered by a soft US retail sales report. When the dust settled, it was down against the yen and the Swiss franc, and sideways versus the euro and the pound. Ongoing concern about the US sub-prime crisis hurt the equity markets and boosted fixed income prices. The Europe/yen crosses were hit by a new wave of unwinding. Today, all eyes will be on the plethora of US data, which includes the PPI, the Empire State survey and the Philly Fed reports.
Euro/dollar
Euro/dollar trimmed gains that took it to a 12-day high of 1.3221 to close virtually unchanged on Tuesday. This means the pair managed to finally extricate itself from an inside range. With the euro/yen under pressure, euro/dollar should be under fire as well.
Below 1.3155, the pair has support at 1.3130. The next level is 1.3095 and there is a pivotal low at 1.3070. Distant support looms at 1.3030.
Above 1.3221, euro/dollar has resistance at the nearby 1.3235 level. There is a pivotal high at 1.3258. Distant resistance is then seen at 1.3296.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Bullish
Dollar/yen
Dollar/yen suffered the second day of losses on Tuesday as more European and commodity currencies were sold versus the yen. The pair is approaching the tip of a triangle, and if the pressure continues, the bottom of this pattern, today at 116.33, will go. In this case, look for a test of the 115.50 level.
Support is at 115.50, from a 50-point pivot, which targets 116.35 and 117.35.
Immediate resistance is at 116.85, from a 50-point pivot which targets 116.35 and 117.35. Distant resistance follows at 118.25 from another 50-point pivot that targets 117.75 and 118.75.
Oscillators are declining.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar marked time in a tight range on Tuesday and got stuck in an inside range. Once again, we still need more information.
Immediate support remains at 1.9265. Below 1.9225, the pair should re-test its pivotal low at 1.9179.
Initial resistance is still in play at 1.9360. Above 1.9432 the pair has distant resistance at 1.9520.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc marched lower on Tuesday and the selling pressure should continue today as well.
Initial support is at 1.2157. A break below this level would invite a slide to the pivotal low at 1.2106. Strong support is at 1.2030. There is a distant pivotal low at 1.1883.
Initial resistance is at 1.2230. A break above this Fibonacci retracement level would signal the return to sideways trading. The pair would then challenge resistance at 1.2280. There is a pivotal high at 1.2354.
Oscillators are edging lower.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish