[B]Forex Market Commentary for February 20, 2007 by Cornelius Luca[/B]
GFT Daily Forex Market Commentary
The dollar edged higher versus the yen, slipped against the euro and the franc and gave up gains versus the pound. Trading was light because of the US holiday. The dollar should edge lower, with dollar/Swiss leading because the pressure from a head-and-shoulders pattern.
Euro/dollar
Euro/dollar climbed up to close at the highest level since early this year. Expect an attempt to push higher still today.
Initial resistance is at 1.3177. Above 1.3200, the euro/dollar should challenge the pivotal 1.3296 area.
Immediate support is at 1.3135. Next level is 1.3080. Below 1.3030 there is support at 1.2985 and 1.2940. There are two distant pivotal lows at 1.2882 and 1.2868.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen struggled higher on Monday as well. However, a double top that targets 117.80 remains in place in place. So, following some mild recovery, the weakness should continue. Of course, all eyes are on the BoJ late Wednesday/early Thursday to see whether is allowed to hike rates. Key level is 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.
Immediate resistance is at 120.15. Above 120.55 there is resistance at 121.05 from a 50-pip pivot, which targets 121.55 and 120.55.
Strong support is at 119.15. Below the pivotal low at 119.00, dollar/yen then has support at 118.25 from another 50-point pivot that targets 117.75 and 118.75.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar recovered early losses caused by the misinterpretation of a macro-economics comment made by the Bank of England. It closed unchanged on Monday and should be mixed today as well.
Initial resistance is at 1.9550. The 1.9585 level must break if a further correction may ensue. Next level is 1.9635. Further resistance looms at 1.9676 from a pivot high.
A break below the key 1.9445 level would signal a test of 1.9390.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc hit a 1 ½-month low on Monday. The downside still seems limited in the short term, so some initial correction is likely. However, the pair formed a head-and-shoulder pattern, which targets 1.2190, so the medium-term outlook is negative.
Immediate support is now seen at 1.2313. Below 1.2285 there is support at 1.2220, but this level should not be seen.
Initial resistance remains at 1.2370. Above 1.2425, resistance remains at 1.2510. There is a pivotal high level is 1.2570.
Oscillators are edging lower.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish