Forex Market Commentary for June 5, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar basically consolidated against the majors on Wednesday, a day after Fed Chairman Bernanke acknowledged the falling US currency. Only the pound stumbled on weak UK data. The Loonie and Kiwi sank as well. If the carry trades falter further, the yen should gain, but as of now, the dollar should go higher.
Euro/dollar
The euro/dollar marked time on Wednesday after plunging a day earlier. It should head lower today, as the medium-term outlook is increasingly negative.
The pair has immediate support at 1.5372, both the low on Tuesday and a Fibonacci retracement level. Further support is pegged at 1.5335. There is a distant pivot low at 1.5287.
Initial resistance is at 1.5445. The further resistance at 1.5520 should continue holding if the negative outlook is correct. If not, look for a rally to 1.5565 and 1.5595. Distant resistance now looms at 1.5740.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen traded sideways and got stuck in an inside range. Expect more of the same, with the 50-pip pivots at 104.40 and 105.60 giving direction.
Immediate resistance is at 105.60 from a 50-point pivot that targets 105.10 and 106.10. Distant resistance is at 106.60.
Initial support is at 105.10. Good support is pegged at 104.50 from a 50-point pivot, which targets 104.00 and 105.00. Distant support comes from a 50-point pivot, which targets 102.90 and 103.90.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly higher
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar tumbled further on Wednesday to the lowest level since May 20. Only if 1.9490 breaks will cable see more weakness.
Below this level, support is at 1.9470. Distant support is now seen at 1.9365.
Immediate resistance is pegged at 1.9550. The next level is 1.9620.Above 1.9690 there is a distant ceiling at 1.9770.
Oscillators are falling.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss consolidated in an inside range and inched further to the tip of a triangle. Some strength is likely.
Initial resistance remains pegged at 1.0490. A break above 1.0533 would signal a spike up to 1.0622.
Immediate support is now seen at 1.0415. The next level is at 1.0375. Below 1.0315, distant support follows at 1.0215.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish