Forex Market Commentary for June 4, 2008 by Cornelius Luca[B]GFT Daily Market Commentary [/B]
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The dollar surged on Tuesday after Federal Reserve Chairman Bernanke came out of the left field on Tuesday and said that policy makers are attentive to the impact of the falling dollar. He also said that interest rates are well positioned to promote growth and stable prices, but that’s less important to traders.
Euro/dollar
The euro/dollar fell sharply on Tuesday, reversing early gains to sink to an over two-week low. It closed lower in five of the past six days and the medium-term outlook is increasingly negative.
The pair has immediate support at 1.5412, 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.
The resistance at 1.5520 should hold if the negative outlook is correct. If not, look for a rally to 1.5565 and 1.5595. Distant resistance looms at 1.5817, but even 1.5740 is distant right now.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Mixed to slightly bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen held above the 55-day moving average and the trendline support, and rallied on Tuesday for an outside day. It would be a bullish reversal if in the right position; but this is not the case, so let’s go with a trend continuation instead. Now, the 50-pip pivots at 104.40 and 105.60 have been the drivers recently, so expect them to remain in place today as well.
Initial 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.
Immediate resistance is at .60 from a 50-point pivot that targets 105.10 and 106.10. Distant resistance is at 106.60.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar tumbled further on Tuesday and this finally broke the pattern of one day up and one day down. But the pair was stuck in an inside range. Expect mixed trading on Wednesday as well.
Initial support is between 1.9598 and 1.9585. A break below this area would signal a further decline to 1.9550. Distant support is seen at 1.9470.
Immediate resistance is pegged at 1.9690. Above 1.9740 there is a further ceiling at 1.9770. A pivot high remains in place at 1.9846.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss had an outside day on Tuesday, but when the dust settled, it closed marginally higher and inched further to the tip of a triangle.
Immediate support is seen at 1.0375. Below 1.0315, distant support follows at 1.0215.
Initial resistance is pegged at 1.0460. A break above 1.0533 would signal a spike up to 1.0622.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
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