Daily Forex Market Commentary
GFT Daily Forex Market Commentary for March 21, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
The pound surged on Tuesday after a high inflation report rekindled considerations for another rate hike in the U.K. Dollar/yen fell briefly on a misunderstood report about China’s FX reserves. Elsewhere, the other European currencies marked time. Expect consolidation today.
Euro/dollar
Euro/dollar traded sideways on Tuesday. It remained stuck in an inside range, so more information is needed.
Initial support remains at 1.3250. The next level is still in place at 1.3200. Below 1.3155, the pair has support at 1.3130.
Above 1.3338, the euro/dollar would eye a pivotal high at 1.3367. The pair then has strong resistance at 1.3435 and 1.3475.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
The dollar fell temporarily against the yen on Tuesday following a report that China would stop stockpiling foreign exchange reserves. The reaction was overdone, given that the news didn’t say China will reduce existing FX reserves, so dollar/yen should attempt to go up today.
The pair had trouble climbing above 118.00, so the short—term long positions were unceremoniously squeezed out. There were two floors at 117.70 and 117.60 and once they broke, dollar/yen fell freely toward 117.00. But this level was well defended, and the pair found its footing above it.
The key support level is at 116.85 from a 50-point pivot which targets 116.35 and 117.35. Distant support I sat 115.50.
Initial resistance comes at 117.65. Strong resisatnce follows at 118.25 from a 50-point pivot that targets 117.75 and 118.75. Distant resistance follows 119.25 and then at 119.65.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
Cable surged to a 3 ½-week high on the U.K. CPI data, breaking the resistance of a trendline declining since January 23. The upside should be targeted further today, but the pace of the upmove should decelerate markedly.
Initial resistance is at 1.9630 from a Fibonacci retracement level. Above 1.9672, resistance is pegged at 1.9746
Strong support is at 1.9550. Below 1.9490, the pair has further support at 1.9430. Distant support now lies at 1.9375.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss marked time on Tuesday and remained stuck in an inside range. More information is needed.
Initial resistance remains at 1.2150. If this level breaks, then the dollar should recover further to 1.2230. Distant resistance comes at 1.2290.
Strong support is still seen at 1.2070. Below a Fibonacci retracement level at 1.2030, dollar/Swiss franc has strong support at 1.2000. Below 1.1970, there is a pivotal low at 1.1901.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
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