Dollar Continues to Weaken Against Yen
GFT Daily Forex Market Commentary for June 7, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The dollar rallied against the euro after the ECB hiked rates, as universally expected, but weakened further versus the yen and the Swiss. The short-term outlook is negative for the US currency.
Euro/dollar
The euro/dollar fell in an inside range on Wednesday, but its double bottom remains in play — if barely. This bullish reversal pattern targets the 1.3600 area.
Initial resistance is now seen at 1.3522. A break above this important level would signal a retest of the 1.3553 area. A more aggressive upmove would attack 1.3610, but this is unlikely. Distant resistance is at 1.3683.
Immediate support is at 1.3485. If the further level at 1.3450 breaks, expect a test of the support at 1.3375. Below this the Fibonacci retracement level there is support at 1.3275.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell on Wednesday as well, as expected, and hit the lowest level since May 25. The short-term outlook remains bearish. Key level remains at 121.05 from a 50-point pivot, which targets 120.55 and 121.55.
Initial support is at 121.90. Next levels are 120.55 and 120.05.
Initial resistance is at 121.55. Above 122.18 the next resistance remains at 122.50 from another 50-point pivot, which targets 122.00 and 123.00.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar marked time on Wednesday and more information is needed. It still looks more and more like an inversed head-and-shoulders, despite its wrong position, and this targets 2.0150. Following a pull back today, it should trade further up.
If the resistance at 1.9970 breaks, then look for a further rally to 2.0035. Distant resistance is at 2.0133.
Initial support is at 1.9905. Next level is 1.9860. Below 1.9727 there distant support at 1.9655.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc fell again on Wednesday to a three-week low and is approaching the target of a double top in the 1.2065 area. The medium-term outlook is negative.
Immediate support is at 1.2150. Below it, the next levels are 1.2125, 1.2095 and 1.2065.
Initial resistance is pegged at 1.2195. Next level is 1.2250. Above the resistance at 1.2332 there is distant resistance is at 1.2370.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Mixed
LONG-TERM: Slightly bearish
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