[B]Forex Market Commentary for June 6, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar fell across the board on Tuesday after Fed Chairman Bernanke said a slowdown in housing construction will remain a drag on the economy. The ECB should hike rates this week, further weakening the dollar. The strong ISM’s services index gave the buck only a fleeting reprieve. The short-term outlook is negative.
Euro/dollar
The euro/dollar rallied on Tuesday as well and confirmed the formation of a double bottom. This bullish reversal pattern targets the 1.3600 area.
Initial resistance is now seen at 1.3575. A break above this important level would signal a more aggressive upmove and another attack on the upside to 1.3610. Distant resistance is at 1.3683.
Immediate support is at 1.3500. If the further level at 1.3450 breaks, expect a test of the support at 1.3375. Below this the Fibonacci retracement level there is support at 1.3275.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell on Tuesday as well and likely formed a bearish reversal from peaking at a four-month high of 122.14 on Friday. The short-term outlook is bearish.
Key support level remains at 121.05 from a 50-point pivot, which targets 120.55 and 121.55.
Initial resistance is at 121.55. Above 122.18 the next resistance remains at 122.50 from another 50-point pivot, which targets 122.00 and 123.00.
Oscillators are mixed.
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar rallied for the fourth consecutive day on Tuesday and this took it to a four-week high. It looks more and more like an inversed head-and-shoulders, despite its wrong position, and this targets 2.0150. Following a pull back today, it should trade further up.
If the resistance at 1.9970 breaks, then look for a further rally to 2.0035. Distant resistance is at 2.0133.
Initial support is at 1.9905. Next level is 1.9860. Below 1.9727 there distant support at 1.9655.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc fell again on Tuesday to a three-week low and formed a double top that targets the 1.2065 area. The medium-term outlook turned negative.
Immediate support is at 1.2160. Below it, the next levels are 1.2125, 1.2095 and 1.2065.
Initial resistance is pegged at 1.2195. Next level is 1.2250. Above the resistance at 1.2332 there is distant resistance is at 1.2370.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Mixed
LONG-TERM: Slightly bearish