Forex Market Commentary for May 27, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar drifted aimlessly during the Memorial Day weekend. Trading should return to normal today, but probably slowly. Expect an attempt to recover before the dollar turns lower.
Euro/dollar
The euro/dollar closed virtually unchanged on Friday and Monday, so the positive outlook remains in place. The interim inversed head-and-shoulders remains in place and my model remains long. Following some profit taking, the upmove should resume.
Initial resistance is seen at 1.5811. Above 1.5865, euro/dollar has distant resistance at 1.6020.
Immediate support remains at 1.5726. The next level remains at 1.5685. This is followed by 1.5460.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen is alternating up and down days, and Friday was a down day and Monday a non-existing day. The pair remains stuck in an inside range, so expect consolidation today. My model remains short.
Key support is at 103.40 from a 50-point pivot, which targets 102.90 and 103.90. A bid support is seen at 102.30 from another 50-point pivot, which targets 101.80 and 102.80.
Immediate resistance is now at 103.90. Strong resistance follows at 104.50 from a 50-point pivot, which targets 104.00 and 105.00.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar struggled higher on Monday but remained in an inside range. My model remains long and the interim inversed head-and-shoulders pattern is still in good shape.
Initial resistance remains at 1.9850. Above it, there is further resistance at 1.9910. Distant resistance is at 2.0030.
Immediate support is at 1.9760. This is followed by 1.9645. Only a break below 1.9545 would jeopardize the cable’s recovery.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss sank to a one-month low of Friday and then remained near the bottom of the range on Monday. This weakness bodes well for my short model. The immediate outlook is bearish after forming a double top that targets 1.0130.
Immediate support remains at 1.0200. This is followed by 1.0130 and 1.0105. Distant support is now pegged at .9877.
Initial resistance comes at 1.0295. The next level is perched at 1.0352. If 1.0390 gives way, expect a test of the distant resistance at .1.0623.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish