Forex Market Commentary for May 19, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar tanked on Friday and the magnitude of its slide shows that the market was bullish. I think the corrective strength of the dollar is over and its downtrend has just resumed. But some mild bounce may be seen today.
Euro/dollar
The euro/dollar rallied to a two-week high and recovered 38.2% of the decline between April 23 and May 8. Its corrective decline is over and the pair should march higher. My model went long on Friday. Are we facing an interim inversed head-and-shoulders?
Initial resistance is at 1.5600. Above 1.5645, euro/dollar has additional resistance at 1.5685.
Immediate support is now seen at 1.5530. The next levels are 1.5460 and 1.5415. These are followed by 1.5287.
Oscillators are bullish.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen sank on Friday and the slide was aggressive enough to turn my model short. The downside remains favored.
Initial support is at 103.40 from a 50-point pivot, which targets 102.90 and 103.90. The next big level is 102.30 from another 50-point pivot, which targets 101.80 and 102.80. Distant support is at 101.25 from a 50-point pivot, which targets 100.75 and 101.75.
Immediate resistance is at 104.50 from a 50-point pivot, which targets 104.00 and 105.00.Oscillators are mixed.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar surged on Friday and this prompted my model to go long. I like this.
Initial resistance remains at 1.9620. Above 1.9680, there is further resistance at 1.9760. This is followed by 1.9875.
Immediate support is now seen at 1.9500. The next level is 1.9459. This is followed by 1.9400 and 1.9363.
Oscillators are mixed.
NEAR-TERM: Slightly higher
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss fell sharply on Friday and my model went short. More weakness is likely.
Immediate support is now seen at 1.0430. This is followed by 1.0350 and 1.0300. Support is then still pegged at 1.0255.
Initial resistance now comes at 1.0500. If this close level gives way, expect a test of 1.0550. This is followed by 1.0622.
Oscillators are falling.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish