[B]Forex Market Commentary for February 14, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar fell across the board on Tuesday, as expected. It should now try to recover, but the odds of success are higher versus the European currencies than against the yen.
Euro/dollar
Euro/dollar reversed Monday’s losses – and some of Friday’s as well, and the strong Eurozone data (GDPs + ZEW) underpinned. Again, the pair remains stuck in an inside range and must exit the consolidation area between 1.2825 to 1.3050 to attract new positions. In the very short term, the downside is favored.
Immediate support is at 1.2980. That is followed by 1.2940. Below 1.2912 the pair has are two pivotal lows at 1.2882 and 1.2868.
Initial resistance is at 1.3045. The 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.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen sank on Tuesday and the odds are high that the upside is done. It’s premature to call for a double top, but it’s surely looking like one is forming.
Initial support remains 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.
Immediate resistance is at 121.80. Above the 122.18 peak, resistance is seen at 122.50 from a 50-point pivot, which targets 122.00 and 123.00.
Oscillators are mixed.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar sank to new one-month low and the weak UK inflation data accelerated the decline. It should attempt a recovery but from lower levels.
Below the one-month low at 1.9400 there still is support at 1.9385. A break below this level would signal a test of the key 1.9330 level. Distant support is pegged at 1.9261.
Initial resistance is at 1.9465. Next levels are at 1.9505 and 1.9535. If the Fibonacci retracement level at 1.9565 breaks, then the pound would recover to the next level 1.9620.
Oscillators are falling.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc fell on Tuesday, as expected, but trimmed losses. It should now attempt to advance again.
Initial resistance is at 1.2530. Above 1.2570, resistance remains at 1.2660 from the target of a bull flag. Next level is 1.2720.
Immediate support is now seen at 1.2470. Below 1.2430 there is support at 1.2375.
Oscillators are edging lower.
NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Mixed
LONG-TERM: Bullish