[B]Forex Market Commentary for May 17, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar rallied aggressively on profit taking amid strong US equity indices and generally firm US economic reports. More strength is likely today, but the leading economic indicators and the Philly Fed reports don’t tend to be market movers.
Euro/dollar
Euro/dollar reversed all of the gains made on Monday and Tuesday and this unexpected decline brings the pair back to square one.
There is initial support at 1.3480. The next level is seen at 1.3463 from a pivotal low. Below 1.3440 there is support at 1.3380. Distant support lies at 1.3310 from a Fibonacci retracement level.
Initial resistance is at 1.3545. The next level is 1.3610. Further resistance looms at 1.3679. Distant resistance remains at 1.3805.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen surged to a new 2 ½-month high. It should attempt to pad its gains today but the pace should decelerate.
Resistance is now seen at 121.05 from a 50-point pivot, which targets 120.55 and 121.55. There is a pivotal high at 122.18.
Initial support is at 120.30. Good support remains at 119.65 from another 50-point pivot that targets 119.15 and 120.15.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar reversed the gains made a day earlier and is now facing strong immediate support at 1.9770. Only a break beneath it would warrant the extension if the declining channel.
Below 1.9770 from a Fibonacci retracement level support now comes at 19.740. A close below the 1.9740 level would signal the end of the uptrend. It would then challenge the 1.9655 area.
Initial resistance is at 1.9830. This is followed by 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.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc surged to a five-week high and this gave a shot in the arm to the ailing upside. In fact, a bullish flag seems to be forming.
Initial resistance now comes at 1.2265. Above 1.2285, the next level is at 1.2350 from a Fibonacci retracement level. Distant resistance is pegged at 1.2437.
Support is now seen at 1.2215. The next levels loom at 1.2175 and 1.2135. Distant support remains at 1.1995.
Oscillators are mixed.
NEAR-TERM: Mixed with negative bias
MEDIUM-TERM: Mixed
LONG-TERM: Slightly bearish