[B]Forex Market Commentary for May 4, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar rallied further versus the majors on Thursday, and particularly versus the yen. All eyes will be on the non-farm payrolls on Friday, which rarely fails in providing fireworks. Tighten your seatbelts, it should be rocky!
Euro/dollar
The overbought euro/dollar broke again the support at 1.3585. It should see more weakness today but it must hold below this sticky 1.3585 level to signal that the big correction has started.
A close 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 marched higher on Thursday and should attempt to advance today as well.
Initial resistance remains 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 traded below the $2 mark on Thursday and hit the lowest levels since mid-April. Lower trading is expected – provided that the non-farm payrolls report is not weak.
Immediate support is at 1.9860. A close below this level would signal a further decline to 1.9800. It would then challenge the 1.9720 area.
Initial resistance remains 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
A higher than forecast Swiss CPI report kept dollar/Swiss franc from trading higher on Thursday. It then closed virtually unchanged. The medium-term selling pressure is still in jeopardy.
Initial resistance remains 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 still in place 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