GFT Daily Forex Market Commentary

[B]Forex Market Commentary for May 3, 2007 by Cornelius Luca[/B]

GFT Daily Forex Market Commentary

The dollar rallied versus the majors on Wednesday, and particularly versus the yen. The US data showed another bit of positive information, and this supported the currency. Factory goods orders rose a more-than-expected 3.1 percent in March from February’s revised 1.4 percent gain, pointing that the US economy is dragging along. The dollar should struggle higher today.

Euro/dollar

The overbought euro/dollar challenged the support at 1.3585 on its way to an over one-week low but reduced losses into the close. It should encounter more weakness today but it must close below this sticky 1.3585 level to signal that the big correction has started.
A break below this level of this consolidation would signal an initial slide to 1.3540 and 1.3525. Further support is pegged at 1.3470 and 1.3420.
If 1.3585 holds, then the pair would challenge the resistance at 1.3683. A break above this level means the euro/dollar will march higher, but I really don’t know why would that happen. Above 1.3735, resistance comes at 1.3805.
Oscillators are mixed.

NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen rallied to its highest level since February 27 and should attempt to advance further on the day.

Initial resistance is at 120.60. Distant resistance now comes at 121.05 from another 50-point pivot, which targets 120.55 and 121.55.

Immediate support remains at 119.65 from another 50-point pivot that targets 119.15 and 120.15. Below 118.85, strong support is still seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Oscillators are rising.

NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Sterling/dollar

Sterling/dollar remained below the $2 mark and broke the support of a rising trendline. Lower trading is expected – provided that a nearby support level gives way.

Immediate support is at 1.9865. A close below this level would signal a further decline to 1.9800. It would then challenge the 1.9720 area.
Initial resistance is at 1.9915. A break above 1.9950 would suggest a recovery to 2.0005. Above 2.0070, resistance remains between 2.0131 and 2.0151, but except for a very weak non-farm payrolls report on Friday, these numbers won’t be seen for a long time.
Oscillators are falling.

NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Dollar/Swiss franc

Dollar/Swiss franc rallied further on Wednesday, briefly breaking above the declining trendline. It then closed virtually unchanged. The medium-term selling pressure r is in jeopardy.
Initial resistance is at 1.2180. A break above this level would signal a more sustained recovery. The next level is 1.2200. Strong resistance is at 1.2275.
Immediate support is at 1.2110. The next levels are at 1.2035 and 1.2015. Below 1.1996 there is a key level at 1.1945.
Oscillators are mixed.

NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bearish