[B]Forex Market Commentary for March 28, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar fell across the board on Tuesday on a combination of general malaise and divergent economic data. The dollar spiked down on news the Ifo index of German business confidence rose to 107.7 in March from 107 in February and the U.S. consumer confidence fell to 107.2 in March from 111.2 in February. But only euro/dollar didn’t get stuck in an inside range. There was a huge spike up in the oil price of over $5 in late trading on fears of a US-Iran conflict. All in all, the bias today is negative for the dollar.
Euro/dollar
Euro/dollar struggled up to a one-week high on Tuesday with help from another weaker than expected US report and a stronger than forecast German report. There still is a bullish bias.
Immediate resistance is at 1.3370. Above 1.3385, the euro/dollar retains resistance at 1.3410, 1.3435 and 1.3475. The pair then has distant resistance at 1.3610.
Initial support is at 1.3330. This is followed by 1.3310 and 1.3280. Below 1.3240, the next floor is at 1.3220. Distant support is at 1.3200.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
The dollar/yen traded sideways in an inside range and closed little changed on Tuesday, but then fell in Asia. This means the outlook remains mixed.
Immediate support is seen at 117.05. 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.
Initial resistance is at 117.75. Strong resistance is 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.
Oscillators are mixed.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar slipped weakly in an inside range on Tuesday after making an aggressive rally a day earlier. The immediate outlook is mildly bullish.
Initial resistance is still seen at 1.9725. Next level is at 1.9755 from a Fibonacci retracement level. Above 1.9830, resistance is pegged at 1.9915 from a pivot high.
Immediate support is at 1.9630. Next levels are 1.9570 and 1.9550. Below 1.9500, the pair has further support at 1.9450. Distant support is now seen at 1.9375.
Oscillators are mixed.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Slightly bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss fell to a four-day low in late trading on the Iran woes. This shows the big players’ willingness to take on large positions on the obviously deteriorating situation with the bellicose Iran. The dictatorship of the oil-rich nation needs to act tough in the region to retain power and wants to project the impression of being an equal to world powers. Easy game for the markets! The immediate outlook is negative.
Initial support is at 1.2090. 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.
Immediate resistance is at 1.2140. If 1.2210 breaks, then the dollar/Swiss franc should march further to 1.2230. Distant resistance comes at 1.2290.
Oscillators are negative.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Bearish
LONG-TERM: Mixed