GFT Daily Market Commentary

Forex Market Commentary for June 6, 2008 by Cornelius LucaGFT Daily Market Commentary

The euro/dollar aggressively reversed from a three-week low after ECB President Trichet signaled a possible rise in euro zone interest rates as early as July. The dollar rallied against the yen, but gave up gains versus the pound and franc. Careful today, as the non-farm payrolls are due. If the ADP is of any significance, the report should not be that weak.

Euro/dollar

The euro/dollar surged from a three-week low following Trichet’s statement and tested the trendline of its channel declining since May 27. If the non-farm is strong, then the pair will go down; if not, the trendline resistance will be toast.
Initial resistance is at 1.5647. If it breaks, look for a rally to the distant resistance at 1.5755.
The pair has immediate support at 1.5540. The next level is 1.5495. Below 1.5415, further support is pegged at 1.5335.
Oscillators are divergent.

NEAR-TERM: Mixed with risk either way
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen exploded to a 3 ½-month high from an inside range. Expect further strength only if 106.42 breaks.

Above this level, resistance is now seen at 106.85. Distant resistance follows at 107.90.
Initial support is now at 105.60 from a 50-point pivot that targets 105.10 and 106.10. 105.10. Distant support comes at 104.50 from a 50-point pivot, which targets 104.00 and 105.00.

Oscillators are rising.

NEAR-TERM: Mixed with risk either way
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

Sterling/dollar recovered from a 2 ½-week low to close little changed on Thursday. It looks like an intermediate bullish reversal, but with the US data pending, it can go either way today.
Immediate resistance is pegged at 1.9600. Above 1.9690 there is a distant ceiling at 1.9770.
Below 1.9515, support is at 1.9470. Distant support is now seen at 1.9365.
Oscillators are mixed.

NEAR-TERM: Mixed with risk either way
MEDIUM-TERM: Bearish
LONG-TERM: Mixed

Dollar/Swiss franc

Dollar/Swiss made the expected upmove only early in the day and then gave it all up. It’s approaching the tip of a triangle and nervous directionless trading should continue.

Immediate support is now seen at 1.0315. Below it, distant support follows at 1.0215.

Initial resistance is seen at 1.0425. The next ceiling remains pegged at 1.0490. A break above 1.0533 would signal a spike up to 1.0622, but this is unlikely.
Oscillators are mixed.

NEAR-TERM: Mixed with risk either way
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish