[B]Forex Market Commentary for February 13, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar rallied across the board on Monday. Dollar/yen rallied after the toothless G7 financial ministers’ criticism of the artificially weak yen. Again, short yen positions against the dollar, commodity and the European currencies should remain favored but if you have them, protect them with relatively tight stops. Somehow, the weakness of the yen at these levels so close to the G7 meeting is suspect. The dollar should first pull back versus the European currencies before attempting another rally.
Euro/dollar fell for the second day on Monday but trimmed losses late in the day. In the medium term, the pair remains stuck in an inside range and must exit the consolidation area between1.2825 to 1.3050 to attract new positions. In the very short term, the upside is favored.
Initial resistance is at 1.2990. The next level is at 1.3045 and euro/dollar should not surpass it the downside is to continue. If it fails, then look for a retest of the four-week high of 1.3074. Above 1.3130, the pair has distant resistance at 1.3200.
Immediate support is at 1.2940. Below 1.2912 the pair has are two pivotal lows at 1.2882 and 1.2868.
Oscillators are mixed.
NEAR-TERM: Mixed with upside bias
Dollar/yen advanced to a near two-week high on Monday following the soft G7 fin mins criticism of the artificially weak yen. For this rally to continue, the pair must smash above the pivotal high at 122.18 on a closing basis.
Above this peak, resistance is still seen at 122.50 from a 50-point pivot, which targets 122.00 and 123.00.
Initial support remains at 121.55. The pair then has strong support at 121.05 from a 50-pip pivot, which targets 121.55 and 120.55. Below 119.95, dollar/yen retains good support at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bullish
Sterling/dollar made the expected bounce only in early trading and then fell further on Monday to coin a marginally new one-month low. It should now make a short-term recovery before encountering further weakness.
Below the one-month low at 1.9436 there still is support at 1.9385. A break below this level would signal test of 1.9340. Distant support is pegged at 1.9261.
Initial resistances are at 1.9505 and1.9535. If the Fibonacci retracement level at 1.9565 breaks, then the pound would recover to the next level 1.9620.
Oscillators are edging lower
Dollar/Swiss franc on Monday closed up for the fourth consecutive day. It should decline first on profit taking and then attempt to advance again.
Immediate support is now seen at 1.2495. Below 1.2430 there is support at 1.2375.
Above 1.2570, resistance remains at 1.2660 from the target of a bull flag. Next level is 1.2720.
Oscillators are edging lower.
NEAR-TERM: Mixed to slightly higher