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Tighten your seatbelts

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Friday, July 07, 2006 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT

The euro spiked up on Thursday after European Central Bank President Trichet made a “veiled” warning that regional rates are going up from the current 2.75 percent as soon as August. All in all, the dollar slipped on profit taking ahead of the release of the non-farm payrolls today. A strong reading above 200,000, in line with the upstart ADP report, would likely boost the buck – and vice versa. Tighten your seatbelts.

Euro/dollar
Euro/dollar struggled higher on Thursday after falling sharply a day earlier. Stay put ahead of the payrolls and take your cues from it.

Immediate resistance is at 1.2800. Further resistance remains at 1.2850 and 1.2919.

Below 1.2710, next support lies at 1.2670 from a Fibonacci retracement level. Further support lies at 1.2610.

Oscillators are mixed.

NEAR-TERM: Mixed with a bearish bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/yen
Dollar/yen gave back most of its Wednesday’s gains, but only a break below 114.80 signals a sustained decline.

Below this level, support is at 114.50. Strong support follows at 114.20 from a 50-point pivot that targets 113.70 and 114.70.

Key resistance is at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00. Next levels are 116.58 and 116.75.

Oscillators are mixed.

NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

Sterling/dollar
Sterling/dollar made a weak bounce on Thursday and remained well within an inside range.

Below 1.8320 support remains at 1.8240. Strong support then lies at 1.8210 and 1.8170.

Initial resistance is still seen at 1.8420. Next level is 1.8470. Above 1.8500, resistance comes at 1.8565 from the 50% mark of the downtrend between May and June. Strong resistance follows at 1.8630.

Oscillators are mixed.

NEAR-TERM: Mixed with a bearish bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss franc edged marginally lower on Thursday.

If it can surpass Wednesday’s high of 1.2356, the pair would challenge the resistance at 1.2375 and then at 1.2405. Further resistance looms at 1.2455.

Support comes first at 1.2275. Below 1.2210, further support is pegged at 1.2150 from a short-term Fibonacci retracement level. Next good level comes at 1.2075.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

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DISCLAIMER: This forum and the information provided here should not be relied on as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. The views of the author are not necessarily those of Global Forex Trading, its owners, officers, agents or employees. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Cornelius Luca will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Cornelius Luca do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought


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