Monday June 14, 2004 - 12:42:54 GMT
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Daily Forex Commentary by Global Forex Trading
Commentary By Cornelius Luca, GFT Analyst
The dollar rallied unexpectedly on Friday on a day when trading was supposed to be thin and quiet. The weekly charts indicate further dollar strength versus the European currencies, but dollar/yen looks mixed. Monday will see an avalanche of data, but the most significant should be the PPI, as inflation will be the Fed focus over the next couple of days.
Euro/dollar fell sharply on Friday to hit the lowest levels since May 27. The pair formed a bearish engulfing pattern of the weekly chart, suggesting further losses.
Below 1.1965, the pair has support at around 1.1920. Further support is at 1.1893.
Above 1.2040, the euro/dollar has resistance at 1.2090 a Fibonacci retracement level at 1.2097. A close above its 20-day moving average at around 1.2115 would signal the end of the decline, but this is unlikely. In that case, the pair would encounter an obstacle 1.2231. A run to the 1.2351 high and to the 1.2387 level would be unlikely.
Oscillators are edging lower.
MEDIUM-TERM: Mixed to slightly bullish
Dollar/yen recovered on Friday to eliminate the losses made in the previous day.
The pair finds good support at 109.15 from the 50-point pivot, which targets 109.65 and 108.65. Further support comes from the Fibonacci retracement level at 107.75.
Any recovery faces an initial obstacle at 111.07 and a break higher opens the gates to a test of the 111.85 retracement level. However, the key resistance level to watch remains the 50-point pivot at 111.60 that targets 112.10 and 111.10.
Oscillators are mixed.
Sterling/dollar collapsed on Friday.
The pair now has initial support at around 1.8150 from its 20-day moving average and at
1.8117 from a Fibonacci retracement level. A break lower would signal a decline to 1.8040.
Above 1.8230, the sterling/dollar has resistance at 1.8284. A break above a Fibonacci retracement level at 1.8312 would challenge the 1.8484 peak.
Oscillators are edging lower.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Slightly higher
LONG-TERM: Slightly higher
Dollar/Swiss franc managed to mount a powerful advance on Friday that lifted it to the highest levels of the month. The weekly candlestick chart shows a bullish reversal formation so this recovery should continue.
The pair has initial resistance at 1.2660 from a Fibonacci retracement level and a break higher would target 1.2740. The next obstacle comes at 1.2800.
Dollar/Swiss franc has initial support at 1.2500 and break lower would target 1.2500. It then has a strong support at 1.2450. A slide to 1.2319 is unlikely on Monday.
Oscillators are rising.
NEAR-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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