GFT Daily Forex Market Commentary

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

GFT Daily Forex Market Commentary

The dollar fell on Tuesday despite an inconclusive US CPI report. Expect more selling pressure today amid a bevy of significant data for April: the Housing starts and building permits reports, and the Industrial production and capacity utilization.

Euro/dollar

Euro/dollar rallied on Tuesday to recover 61.8% of its recent losses. It also broke a short-term resistance line, so the upside is favored.
Initial resistance is at 1.3610. If 1.3679 breaks, then look for a test of the distant resistance at 1.3805. This is unlikely.

There is initial support at 1.3550. The next floors are seen at 1.3505 and then at 1.3480. Below 1.3463 there is support at 1.3440. Next support is at 1.3390.

Oscillators are mixed.

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

Dollar/yen

Dollar/yen traded sideways on Tuesday, as expected, even though it coined a 2 ½-month high. It should consolidate further today.

Good support remains at 119.65 from another 50-point pivot that targets 119.15 and 120.15.
Resistance is still seen at 120.50 and 120.75. Distant resistance now comes at 121.05 from a 50-point pivot, which targets 120.55 and 121.55.
Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Sterling/dollar

Sterling/dollar reversed losses from a one-month low to close higher on Tuesday. After consolidating further within the declining channel, look for another slide.
Initial resistance remains at 1.9905. The next level is seen at 1.9995. Above 2.0070, the pound is back on the attack, but this is very unlikely.

Immediate support comes at 1.9800. The next level is pegged at 1.9770 from a Fibonacci retracement level. A close below the 1.9740 level would signal the end of the uptrend. It would then challenge the 1.9655 area.
Oscillators are mixed.

NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/Swiss franc

Dollar/Swiss franc fell to a one-week low on Tuesday and briefly violated its rising support. The upside is in danger.
Support is now seen at 1.2125. The next levels loom at 1.2100 and 1.2060. Distant support lies at 1.1995.
Initial resistance is at 1.2175. The next level is at 1.2215 from a Fibonacci retracement level. That’s followed by 1.2265 and 1.2285. Distant resistance is at 1.2350.
Oscillators are mixed.

NEAR-TERM: Mixed with negative bias
MEDIUM-TERM: Mixed
LONG-TERM: Slightly bearish