[B]Forex Market Commentary for May 23, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar marched higher on Tuesday, as well, as expected. The euro fell despite the strong ZEW report. Meanwhile the pound managed to reverse early loses. The US currency is overbought in the short term, so the odds are that it will correct lower today. Only the Swiss should lag after SNB’s Roth made hawkish remarks on his currency.
Euro/dollar
Euro/dollar marched lower on Tuesday, hitting a new low versus April 12. It should bottom early and then attempt to make a weak and brief recovery.
Immediate resistance is at 1.3495. Only a close above 1.3545 would signal another attack on the upside to 1.3610. This is unlikely.
Initial support is at 1.3430. Below it there is support at 1.3390 and 1.3375. Next support is at 1.3305.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen climbed to a new three-month high on Tuesday. It may attempt to make a brief corrective pullback before the next move higher.
Initial support is still seen at 121.05. Next level is 120.55. Below 120.00, distant support comes at 119.65 from another 50-point pivot that targets 119.15 and 120.15.
Above 121.65, resistance remains at 122.18. Further resistance comes at 122.50 from another 50-point pivot, which targets 122.00 and 123.00.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar reversed early losses to close higher on Tuesday. This recovery owes to cross trading and should continue today as well. The medium-term outlook remains bearish.
Strong resistance is between 1.9770 and 1.9780. If the resistance at 1.9800 breaks, then look for a rebound to 1.9885.
Initial support is at 1.9715. There still is good support at 1.9655. A close below this level would signal a further slide to 1.9545.
Oscillators are mixed.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc surged to a new over two-month high and its bullish flag is on track. SNB’s Roth hawkish comments on the CHF helped. The medium-term outlook remains positive, but the pair may edge lower on profit taking.
Immediate support is at 1.2285. This is followed by 1.2210. Below 1.2170, distant levels are 1.2095 and 1.2065.
Above the resistance at 1.2332 there is good resistance at 1.2370. Next target is 1.2437. Distant resistance looms at 1.2554.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Slightly bearish