Thursday May 20, 2004 - 13:34:31 GMT
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GFT Forex Commentary - May 20, 2004
Daily Forex Market Commentary for Thursday, May 20, 2004 8:00 GMT
Daily Commentary By Cornelius Luca, GFT Currencies Analyst
(for more forex resources, see: http://www.gftforex.com/resources/daily.asp?date=5202004 or contact Tim Gort, [email protected]
The dollar fell sharply versus the pound and the yen and posted more subdued loses against the euro and the Swiss franc on Wednesday. The pound was the net winner on expectations that the Bank of England will hike rates again soon. Continental Europe is closed on Thursday and the US data are not top shelf, so the market should consolidate in pre-existing ranges.
Euro/dollar saw the expected mild gains on Wednesday that it managed with help from its 20-day moving average. The pair remains in an inside range of 1.1875 to 1.2060 and it’s unlikely that it can break out today.
Below the support of the 20-day moving average at around 1.1940, the pair has support at 1.1919 and then at 1.1877. If the last level breaks, which is unlikely, look for a test at 1.1820.
Above 1.2040, the euro/dollar has resistance at 1.2060. A break higher would accelerate the upmove to 1.2115.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly higher
Dollar/yen confirmed that it was toppish and fell to a one-week low of 112.42 on Wednesday. The break below the 50-point pivot at 112.90 has yielded its downside target at 112.40 – right on the money! The sell-off was overdone, so the pair should now grind higher.
Above 113.36, there is pivotal resistance at 114.10. Key resistance is once again at the 114.20 50-point pivot, which targets 113.70 and 114.70. Distant resistance remains from the 50-point pivot at 115.50, which targets 115.00 and 116.00.
Below 112.40, the dollar/yen finds support at 112.06. Distant support now lies at 111.60 from another 50-point pivot, which targets 112.10 and 111.10.
Oscillators are mixed.
NEAR-TERM: Mixed to slightly bullish
Sterling/dollar broke out from an inside range on Wednesday as it soared to a none-day high of 1.7854 amid fears of another rate hike. The move was overdone, but sell only on a break below the 20-day moving average at around 1.7767, as this strength may initially persist.
Below 1.7767 there is support at 1.7680 and a break lower would signal a decline to 1.7585. Pivotal support lies at 1.7479.
Above 1.7854 there is resistance at 1.7949. A close above this level would trigger an upmove toward the pivotal resistance at 1.8016.
Oscillators are edging higher.
Dollar/Swiss franc gave back it slight gains made on Tuesday but once again it remained stuck in an inside range and below the critical resistance from its 20-day moving average at 1.2863.
The pair has support at 1.2742. Below the pivotal low at 1.2690, it still has support at the 1.2600 area.
If it manages to break above the 20-day moving average, the dollar/Swiss franc will face immediate resistance at 1.2870 from a Fibonacci retracement level. A break above this level would target 1.2912. Further resistance comes at 1.3000.
Oscillators are mixed.
MEDIUM-TERM: Mixed to slightly bullish
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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