[B]Forex Market Commentary for April 11, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The euphoria that followed the strong U.S. non-farm payrolls a week earlier didn’t last much and the dollar took a nosedive on Tuesday amid concerns that the trade friction between the U.S. and China will worsen and that the IMF will be forced to take a stronger stand against the artificially protected Asian economy. The dollar should remain under pressure today, but the lack of follow through after a downward breakout without a real reason raises a red flag.
Euro/dollar
Euro/dollar didn’t see anymore weakness on Tuesday and instead it shot up to an over two-year high. It should attempt to pad its gains after the breakout, but confirmation is clearly needed.
Above Tuesday’s high at 1.3445, resistance is seen at 1.3475 and 1.3510. The next levels are 1.3555 and 1.3588. There is a pivotal high at 1.3666.
Immediate support comes at 1.3420. The next levels are 1.3365 and 1.3340. Below 1.3300, support is pegged at 1.3253.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen reduced early losses and is now struggling for direction. Given the current IMF developments toward China, the mildly overbought pair should retain downside bias.
Below 118.75, strong support remains at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Initial resistance is still seen at 119.65 from another 50-point pivot that targets 119.15 and 120.15. Above 120.75, distant resistance now comes at 121.05 from another 50-point pivot.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar broke back above 1.9625 on Tuesday and its recovery turned aggressive enough to reverse its losses made around the Easter. It should attempt to add to these gains today.
Immediate resistance is at 1.9821. If this pivotal level breaks, the pound would likely attack the 1.9905 area.
Initial support comes at 1.9705. Below 1.9680, strong support follows at 1.9640. A pivotal low is at 1.9590.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Dollar/Swiss franc
The overbought dollar/Swiss franc fell sharply on Tuesday. The pair is approaching the bottom of its rising channel, so the downside should be limited.
Below 1.2140, support is seen nearby at 1.2125, which marks the bottom the channel. If this floor buckles, then dollar/Swiss franc would likely challenge the 1.2075 level. A key level follows at 1.2050.
Initial resistance comes at 1.2195. Next level is 1.2238. Above 1.2282, strong resistance comes at 1.2330.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed with upside bias
LONG-TERM: Mixed