Forex Market Commentary for March 19, 2008 by Cornelius Luca
GFT Daily Market Commentary
The Federal Reserve met (most) of the market expectations and cut its overnight rate by 75 bps to 2.25 percent and the discount rate to 2.5 percent in an attempt to help the US economy and financial system. The odds are high that the dollar bottomed, but a confirmation is pending. There is no US data scheduled for release, but the UK employment report will be seen.
Euro/dollar
Euro/dollar sank on Tuesday following an apparent bearish reversal signal and my model reversed long positions held since February 14. A peak is probably in place, but confirmation is needed.
Immediate support is at 1.5610. This followed by 1.5520, and a break below this would strengthen the case for a major decline. Below 1.5545, there is further support at 1.5285.
Initial resistance is now at 1.5720. Above 1.5755, resistance now comes at 1.5830 and then at 1.5902.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen formed a bullish reversal on Tuesday and probably put in a significant bottom. My system reversed its short positions. The upside is tempting. Key support is 100.25 from a 50-point pivot, which targets 99.75 and 100.75.
Immediate resistance is now seen at 100.45. The next levels are perched at 101.25 and 101.90. Distant resistance is seen at 103.60.
Initial support comes at 99.25 from a 50-point pivot, which targets 98.75 and 99.75. Distant support is at 95.75.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar encountered choppy trading and closed slightly higher on Tuesday. Mixed trading is likely today.
Initial resistance now comes at 2.0195. This is followed by 2.0260. A break above 2.0335 would signal another further rally to 2.0397.
Immediate support is now seen at 2.0050. This is followed by 2.0005. Below 1.9943, the next level follows at 1. 9765.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss surged on Tuesday and this prompted my model to go long. The upside is favored.
Immediate support is seen at 0.9950. Below 0.9850, distant support is now pegged at 0.9745.
Initial resistance is now at 1.0055. This is followed by 1.0145. The next level is 1.0200.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish