[B]Forex Market Commentary for June 13, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar rallied further on Tuesday against the euro and the franc, but recovered versus the pound. This strength owes to Bank of England Governor King, who warned against further rate hikes. The market obviously ignored news that the UK CPI slipped to 2.5% on a yearly basis in May from 2.8% in April. The dollar should consolidate today.
Euro/dollar
Euro/dollar fell to a 2 ½-month low on Tuesday. Following a brief recovery it should extend its decline further.
Immediate support is now seen at 1.3275. Below this 50% retracement level there is support at 1.3175 from a Fibonacci retracement level.
Initial resistance is now seen at 1.3370. Next strong level is 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.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen marked time on Tuesday as well, and the short-term outlook is now mixed. Look for more consolidation
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: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar recovered 38.2% of the losses made since June 5 due to King’s hawkish comments. The medium term outlook is still slightly bearish, but again only a close below 1.9650 would confirm this view. Expect some consolidation today
Immediate resistance is at 1.9770. If the strong 1.9800 level breaks, then look for a further rebound to 1.9870.
Initial support is at 1.9710. If 1.9650 breaks, look for further support at 1.9623. A close below this level would signal a further slide to 1.9545. This is unlikely.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc rallied further on Tuesday to a new near four-month high. The medium term outlook is bullish, in line with the inversed head-and-shoulders.
Above the Fibonacci retracement level at 1.2450 there is good resistance is at 1.2540. Distant resistance looms at 1.2570
Immediate support is at 1.2380. The next level is 1.2350. Below 12285, strong support follows at 1.2210.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Slightly bearish