Forex Market Commentary for May 21, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar was trashed on Tuesday amid a soaring oil price and tanking stocks. There are some intermediary inversed head-and-shoulders patterns in euro and cable and my model now went short dollars against some of the European currencies, and this makes sense. The US currency should remain under pressure today, but watch out for the Ifo report.
Euro/dollar
The euro/dollar rallied to its highest level since late April and the interim inversed head-and-shoulders I was wondering about the previous day came to fruition. My model remains long. The rising channel remains in place.
Initial resistance is now seen at 1.5680. Above 1.5740, euro/dollar has distant resistance at 1.5865.
Immediate support is now seen at 1.5595. The next level is d 1.5510. This is followed by 1.5397.
Oscillators are bullish.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen bored its way out from an inside range and coined a one-week low. My model remains short and 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 104.10. Strong resistance remains 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 to a near two-week high and this forced my model to go long after being short a day earlier. At least I like move, especially since it formed interim inversed head-and-shoulders.
Initial resistance now moved to 1.9719. Strong resistance is seen nearby at 1.9730. Above 1.9766, there is further resistance at 1.9880. Distant resistance is at 2.0030.
Immediate support is now seen at 1.9645. This is followed by 1.9585. Only a break below 1.9495 jeopardized the cable’s recovery.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss collapsed to its lowest level since May 1 and my model now went short. The immediate outlook is bearish, but the medium-term channel is rising.
Immediate support is now seen at 1.0310. This is followed by 1.0280, which is the rising trendline. Below 1.0200, distant support is then pegged at 1.0105.
Initial resistance now comes at 1.0410. If 1.0455 gives way, expect a test of 1.0623. Distant resistance is at 1.0800.
Oscillators are mixed.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish