GFT Daily Forex Market Commentary

[B]Forex Market Commentary for April 16, 2007 by Cornelius Luca[/B]

GFT Daily Forex Market Commentary

The dollar fell sharply versus the European currencies on Friday on renewed expectations of higher rates outside the U.S. versus flat domestic borrowing costs and the yen sank on misplaced disappointment that the G7 was not planning to criticize Japan for its artificially weak currency.

Euro/dollar rallied to a 2 ½ years on Friday. It’s overbought, but sell it only if a bearish reversal is confirmed. On a medium-term basis, the euro/dollar formed several bullish flags.
Initial resistance is at 1.3620. Above 1.3705, distant resistance is at 1.3805.
If 1.3620 holds, look for a correction toward 1.3440. Intermediate support is at 1.3540 and 1.3500.
Oscillators are rising.

NEAR-TERM: Mildly bullish
LONG-TERM: Bullish


Dollar/yen encountered very volatile conditions on Friday, when it reached a 1 ½-month high and formed the range for the entire week. It’s still facing the key Gann levels that bordered it last week, so only closes outside them will inject new life in this pair. Dollar/yen has been pushing against the top of its rising resistance for six consecutive days, so unless it breaks higher quickly, the downside will become really favored.

Initial resistance remains at 119.65 from another 50-point pivot that targets 119.15 and 120.15. Distant resistance now comes at 120.75.

Below 118.75, strong support remains at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Oscillators are rising.

NEAR-TERM: Slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish


Sterling/dollar nailed an over 2 ½-month high of 1.9886 on Friday. It should attempt to pad its gains, but it is difficult to ignore the fact that the MACD provides a bearish divergence and that the pair is overbought. This suggests that long positions should be accompanied by fairly close stop-loss orders.
Initial resistance is at 1.9905. If this Gann level breaks, the pound would likely take attack another Gann level at 1.9990. This is only a hair away from the psychological 2.0000 level.

Immediate support is at 1.9825. Below 1.9780, strong support follows at 1.9700.
Oscillators are rising.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Slightly bullish

Dollar/Swiss franc

Dollar/Swiss franc fell to as low as a three-week low on Friday, but when the dust settled, it failed to close outside its rising channel. Expect more attempts to close below this line, now at around 1.2145.
If successful, look for a re-test of the support at 1.2068. Below it there is a key level at 1.2030. Dollar/Swiss franc then has strong support at 1.2000.

Initial resistance comes at 1.2230. Next level is 1.2290. Distant resistance is at 1.2370.
Oscillators are mixed.

NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with upside bias