[B]Forex Market Commentary for April 19, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar sank across the board on Wednesday and its pullback was light and incomplete. This suggests the US currency will come under medium-term selling pressure. The dollar should decline today as well.
Euro/dollar
Euro/dollar rallied to a new 2 ½-year high on Wednesday after following the signs for a bearish reversal only briefly. The pair is overbought, but stay with it unless its decline is confirmed.
Initial resistance is at 1.3645. Above 1.3705, distant resistance is at 1.3805.
Immediate support is at 1.3570. Next level is 1.3524. Below 1.3470 there is support at 1.3440. Distant support is at 1.3390.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell to the lows of the week on Wednesday before trimming losses. The yen is a function of the crosses, not the dollar, so it should trade sideways, while the European currencies rally. Again, its next move is dependant on its behavior at 118.65.
Strong support remains at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Above 118.85 strong resistance is still seen at 119.65 from a 50-point pivot that targets 119.15 and 120.15. Above 120.15 resistance is seen at 120.75.
Oscillators are edging lower.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar surged to a 26-year high of 2.0133 on Wednesday in the aftermath of the high UK CPI report a day earlier, which suggested higher rates in England. The pair is obviously heavily overbought, and formed a probable doji, but some additional strength may linger today.
Initial resistance is still seen between 2.0140 and 2.0155. If this area breaks, the pound would likely take attack a Gann level at 2.0200.
Immediate support is at 2.0015. This is followed by 1.9975. Below 1.9955, strong support follows at 1.9925.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc fell to a four-month low on Wednesday. The risk remains on the downside.
Immediate support is at 1.2010. Below it there is a key level at 1.1945. Dollar/Swiss franc then has strong support at 1.1885.
Initial resistance comes at 1.2050. Next level is at 1.2095. Above 1.2145, the next level is 1.2200. Distant resistance is at 1.2255.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bearish