[B]Forex Market Commentary for March 23, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar rallied sharply on Thursday, and this confirms my expectations that the market overreacted on the downside late on Wednesday. The market rightfully showed little reaction to the Leasing indicators report. On Friday, the dollar should edge higher, after forming bullish reversal formations against the euro and the pound…
Euro/dollar
Euro/dollar fell from a two-year high on Thursday and formed a bearish reversal formation. This means the bullish flag it formed a day earlier is on hold. It should edge lower today, but only a vigorous break below 1.3300 would turn the outlook negative.
Key support is at 1.3300 from a trendline rising since March 9. Below 1.3270, the next level is seen at 1.3220. Distant support is at 1.3200.
Initial resistance is at 1.3340. Above 1.3385, the euro/dollar has resistance at 1.3435 and 1.3475. The pair then has distant resistance at 1.3610.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
The dollar/yen rallied to a 10-day high and this finally broke the one-day-up/one-day-down pattern. This rally will not continue without a pause.
Initial resistance comes at 118.25 from a 50-point pivot that targets 117.75 and 118.75. Distant resistance follows 119.25 and then at 119.65.
Immediate support is at 117.70. The key support level is at 116.85 from a 50-point pivot which targets 116.35 and 117.35. Distant support I sat 115.50.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar fell from a 1 ½-month high and formed a bearish reversal formation. The pair should edge lower today.
Strong support is at 1.9550. Below 1.9500, the pair has further support at 1.94450. Distant support is now seen at 1.9375.
Initial resistance is at 1.9725. Next level is 1.9755 from a Fibonacci retracement level. Above 1.9830, resistance is pegged at 1.9915 from a pivot high.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss reversed early losses and formed an outside . However, the pair remains stuck in last Friday’s range, so more information is needed.
Initial resistance remains at 1.2190. If this level breaks, then the dollar should recover further to 1.2230. Distant resistance comes at 1.2290.
Initial support is at 1.2140. Support is then seen at 1.2070. Below a Fibonacci retracement level at 1.2030, dollar/Swiss franc has strong support at 1.2000. Below 1.1970, there is a pivotal low at 1.1901.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish