[B]Forex Market Commentary for May 24, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar consolidated at the high of its uptrend against the yen, euro and the franc. Meanwhile the pound surged on expectations for further rate hikes. The US currency remains overbought in the short term, so it should correct lower today.
Euro/dollar
Euro/dollar marched further down on Wednesday, hitting a new low versus April 12 before recouping losses. It should attempt to make a weak and brief recovery.
Immediate resistance is at 1.3500. Only a close above 1.3545 would signal another attack on the upside to 1.3610. This is less likely.
Initial support is at 1.3415. Below it there is support at 1.3390 and 1.3375. Next support is at 1.3305.
Oscillators are declining.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen reached a new three-month high of 121.87 on Wednesday. It may attempt to make a brief corrective pullback before the next move higher.
Above 121.87, resistance remains at 122.18. Further resistance comes at 122.50 from another 50-point pivot, which targets 122.00 and 123.00.
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.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar surged to a near two-week high on Wednesday. This expected rally was fueled by news that the BoE minutes showed that the central bank’s decision to hike rates this month was unanimous, and some members even had considered a 50-bp rise. More strength should be seen, but the pace of the recovery should decelerate.
Strong resistance is seen at 1.9900 from the top of its declining channel. If this level breaks, then look for a rebound to 1.9960. Above 2.0000 there is distant resistance at 2.0140.
Initial support is at 1.9790. Below 1.9715 there still is good support at 1.9655.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc reversed from a four-day low and should consolidate today. The medium-term outlook remains positive, but the pair may edge lower on profit taking.
Immediate support is at 1.2240. 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 rising.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Slightly bearish