[B]Forex Market Commentary for June 11, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar rallied aggressively on Friday against both the European currencies and the yen. The big factor remained the surge of the yield of the 10-year Notes to above 5%; with the yields rising, the US currency should be further supported. Keep an eye on the stock markets for the rest of the week. The US currency should first head lower and then attempt to resume its strength.
Euro/dollar
The euro/dollar fell on Friday as well to reach a two-month low. It reduced losses late in the day and should continue its recovery first but then resume its decline.
Immediate support is at 1.3322. Below this the Fibonacci retracement level there is support at 1.3275.
Initial resistance is still seen at 1.3450. Only a break above the important level at 1.3522 would signal a retest of the 1.3553 area. A more aggressive upmove would attack 1.3610, but this is unlikely. Distant resistance is at 1.3683.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied on Friday, as I had suggested, and erased 78.6% of the losses encountered after June 4. The short-term outlook is still bullish. Key level remains at 121.05 from a 50-point pivot, which targets 120.55 and 121.55.
Above 122.18 the next resistance remains at 122.50 from another 50-point pivot, which targets 122.00 and 123.00.
Initial support is 121.55. Key support level remains at 121.05 from a 50-point pivot, which targets 120.55 and 121.55.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar fell to a two-month low following intense sales on Thursday and Friday. The medium term outlook is slightly bearish, but only a close below 1.9650 would confirm this view. It cut losses late in the day and should continue its recovery first but then resume its decline.
If this level gives way on a closing basis, look for further support at 1.9623. A close below this level would signal a further slide to 1.9545.
Immediate resistance is at 1.9770. If it breaks, then look for a further rebound to 1.9870.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc rallied on Friday to a near four-month high. The medium term outlook is slightly bullish, but a pullback is likely first.
Above the resistance at 1.2367 there is good resistance is at 1.2425.
Immediate support is at 1.2255. Strong support follows at 1.2210. Below 1.2170, the next levels are 1.2095
Oscillators are mixed.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Slightly bearish