[B]Forex Market Commentary for February 8, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The euro/yen was the rising star on Wednesday, as both the euro/dollar and dollar/yen rallied. The latter continued from Treasury Secretary Paulson’s comments a day earlier, which lowered speculation that yen weakness will be singled out in the G7 meeting this week. The dollar marked time against the pound and the franc. Continue focusing on the yen crosses and the euro/Swiss cross while the dollar follows divergent paths.
Euro/dollar
Euro/dollar marched further on Wednesday and looks close to exiting the 38.2% to 61.8% consolidation area (1.2825 to 1.3030). The initial bias is still bullish.
Initial resistance remains at 1.3030. Above the four-week high of 1.3064, which was reached on Friday, the pair has strong resistance at 1.3080.
Immediate support is at 1.2970. That is followed by1.2945 and 1.2913, which was the low on Monday. Then, there are two pivotal lows at 1.2882 and 1.2868.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen reversed 38.2% of its recent downmove, as the market followed more clearly Treasury Paulson’s comments, which seemed to have taken the yen off the G7 “to do” list. The rally should stall here and the bias is on the downside.
Initial support is at 120.55. The pair then has good support at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.
Immediate resistance comes at 121.05 by a 50-pip pivot, which targets 121.55 and 120.55. Above 121.87, the peak of March 2003, resistance remains at 122.50 from a 50-point pivot, which targets 122.00 and 123.00.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar treaded water on Wednesday. Once again, the pair needs more information before a new direction ensues.
There is immediate support at 1.9660. A break below the 1.9570 level would signal a decline to 1.9534, but this is unlikely.
Initial resistance is at 1.9750. If this Fibonacci retracement level breaks, then the pound would challenge the next level 1.9822 – but this is very unlikely.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc made a weak recovery on Wednesday after falling sharply a day earlier. It should attempt to advance, but it’s not that clear.
Initial resistance is at 1.2430. Above 1.2475, resistance comes at 1.2515. Distant pivotal resistance is at 1.2575.
Immediate support now comes at 1.2379. Then, support remains at 1.2330. Strong support follows at 1.2285.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish