GFT Daily Forex Market Commentary

[B]Forex Market Commentary for February 21, 2007 by Cornelius Luca[/B]

GFT Daily Forex Market Commentary

The dollar rallied versus the yen, pound and francs but traded sideways against the euro on Wednesday. The BoJ was allowed to hike rates to .5% and to promise gradual rates. The dollar should edge higher, especially after the dollar/Swiss failed to buckle under the pressure from a head-and-shoulders pattern.

Euro/dollar

Euro/dollar on Tuesday fell from the highest level since early this year but then traded sideways. This reversal suggests mixed trading today.

Immediate support is at 1.3115. Next level remains 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.
Initial resistance is at 1.3160. Above 1.3200, the euro/dollar should challenge the pivotal 1.3296 area.
Oscillators are rising.

NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/yen

Dollar/yen struggled higher on Tuesday as well but then rallied after the BoJ hiked rates early Wednesday. The market had discounted the move and should now edge higher still.

Good resistance is at 121.05 from a 50-pip pivot, which targets 121.55 and 120.55. There is a pivotal high at 122.08.
Initial support is at 120.55. Below 120.00 there is support at 119.65 from a 50-pip pivot, which targets 120.15 and 119.15.119.15.
Oscillators are rising.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Sterling/dollar

Sterling/dollar recovered further on Tuesday but there is little reason (outside the euro/sterling cross) to expect much more strength here. The pair should turn lower to remain in a trading range.
Immediate support is at 1.9475. A break below the key 1.9445 level would signal a test of 1.9390.
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.
Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed

Dollar/Swiss franc

Dollar/Swiss franc rallied from a new 1 ½-month low on Tuesday and the head-and-shoulder pattern, which targets 1.2190, is now in danger.

Initial resistance is seen at 1.2410 and this level must hold on a closing basis if there is much hope for a medium-term decline. Above 1.2425, resistance remains at 1.2510. There is a pivotal high level is 1.2570.

Immediate support is now seen at 1.2370. Further support lies at 1.2313. Below 1.2285 there is support at 1.2220, but this level should not be seen.
Oscillators are rising.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish