[B]Forex Market Commentary for April 27, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar rallied versus the European currencies on Thursday, as expected. The surprise came from dollar/yen, which exploded higher as well, after marking time for a week. The dollar should attempt to march higher – provided that the US GDP is not as weak as it is rumored.
The overbought euro/dollar headed down on Thursday and hit strong support at 1.3590. It is swerving in the upper half of its rising channel, so only an aggressive break below 1.3590 would invite a further downmove.
If this level gives way, euro/dollar should test the support at 1.3550. If this level breaks as well, this would signal the end of the upmove. Good support follows at 1.3470. Distant support remains at 1.3390.
Initial resistance is at 1.3655. Above 1.3718, the pair has distant resistance is at 1.3805.
Oscillators are edging down.
Dollar/yen exploded higher on Thursday on cross trading and managed to break above the middle of its rising channel. It’s probing significant resistance at the opening levels, and the pair’s behavior at this level would dictate the next direction. Expect aggressive trading today, but the next direction is unclear.
Initial resistance is at 119.65 from a 50-point pivot that targets 119.15 and 120.15. Distant resistance is at 120.55.
Immediate support is between 119,15 and 119.00. Strong support is still seen at 118.25 by a 50-point pivot that targets 117.75 and 118.75.
Oscillators are mixed.
Sterling/dollar made an aggressive decline below the $2 area and hit a nine-day low on Thursday. It must pierce significant support at 1.9860 if the slide may continue unabated.
If 1.9860 gives way, the pair would challenge the support at 1.9800. Distant support follows at 1.9705.
Initial resistance is at 1.9980. Above 2.0050, the next level is 2.0100. Next cap is seen between 2.0140 and 2.0155.
Oscillators are declining.
NEAR-TERM: Mixed with bearish bias
One day after hitting a four-month low dollar/Swiss franc made a nice recovery that was fueled by short covering. It looks like a double bottom is forming, but there is no confirmation yet. The immediate outlook is positive, but the medium-term view remains slightly bearish.
Initial resistance is at 1.2130. A confirmation that the slide is over would come only from a break above this level. Further resistance comes at 1.2200. Distant resistance is still seen at 1.2255.
Immediate support is at 1.2065. Very significant support is at 1.1990 and then nearby at 1.1980 from a trendline rising since January 2005. Only an aggressive move beneath this line would signal a sustained decline. There is a key level at 1.1945. Dollar/Swiss franc then has strong support at 1.1885.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bearish