[B]Forex Market Commentary for May 18, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar remained in the driver’s seat on Thursday amid mixed economic reports and strong equity indices. Friday should see the US currency up as well. The preliminary Michigan sentiment report for May is due on Friday. The same day will mark the start of the two-day meeting of the G8 Financial ministers - don’t expect anything of substance with regard to FX.
Euro/dollar
Euro/dollar sank further on Thursday and this decline may persist today as well.
There is strong support at 1.3425. Below it there is support at 1.3380. Distant support lies at 1.3310 from a Fibonacci retracement level.
Initial resistance levels are at 1.3515 and 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 rallied to a new 2 ½-month high on Thursday. It should attempt to pad its gains on the day as well but the pace should decelerate.
Resistance is now seen at 121.55. There is a pivotal high at 122.18. Distant resistance looms at 122.50.
Initial support is at 121.05 from a 50-point pivot, which targets 120.55 and 121.55. 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 broke below the strong support at 1.9770 on its way to a five-week low. This weakness warrants the extension if the declining channel.
Initial support is at 1.9725. A break below this level would signal the end of the uptrend. It would then challenge the 1.9655 area.
Initial resistance is at 1.9800, Above 1.9830 there is resistance 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.
Oscillators are declining.
NEAR-TERM: Mixed with negative bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc surged to its highest level since April 9 and its bullish flag seems to be on track.
Initial resistance now comes at 1.2285. Above it, the next level is at 1.2350 from a Fibonacci retracement level. Distant resistance is pegged at 1.2437.
Immediate support is at 1.2245. Support is then 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 positive bias
MEDIUM-TERM: Mixed
LONG-TERM: Slightly bearish