Forex Market Commentary for February 22, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar fell sharply on Thursday after the important Philly Fed report showed further losses. Friday is US-data free, so at least some residual dollar weakness is likely.
Euro/dollar
Euro/dollar made a sharp rally on Thursday to reach an over two-week high. The pair should now attempt another rally today – or at least for part of the day.
Initial resistance comes at 1.4846 and this nearby level must give way if any additional strength can be seen. Above 1.4913, there is a pivotal top at 1.4956.
Immediate support is at 1.4755. Below the strong 1.4700 floor, there is further support at 1.4620.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen sank on Thursday, as expected. Friday should be a down day – but likely only in the morning. Only a break below the trendline at 107.09 would signal further weakness.
So, below 107.09, strong support is seen at 106.75 from a 50-point pivot that targets 106.25 and 107.25.
Above 107.60, resistance is at 107.95 from a 50-point pivot that targets 107.45 and 108.45. Distant resistance remains at 109.15.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
Sterling/dollar
One day after hitting a one-month low, sterling/dollar surged on Thursday with help from am unexpectedly strong UK retail sales report. The rally will continue only if the declining trendline at 1.9640 is surpassed.
If it does, then expect a test at 1.9680. There is a pivot high at 1.9738. Distant resistance looms at 1.9810.
Immediate support is now seen at 1.9575. Below 1.9515 there is distant support at 1.9415.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss is still alternating up and down days, and Thursday saw an aggressive decline. Only a break below 1.0865 would signal further weakness today.
If it breaks, look for a test of the next support is seen at 1.0810. Distant support is pegged at 1.0729 from a pivot low.
Initial resistance now comes at 1.0915. Strong resistance follows at 1.1047. Distant resistance remains at 1.1105.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish