Thursday June 17, 2004 - 13:14:58 GMT
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Daily Forex Commentary by Global Forex Trading
Daily Commentary By Cornelius Luca, GFT Analyst
The dollar made a powerful recovery on Wednesday after traders reviewed their overreaction to Fed Chairman Greenspanís statement on inflation on the previous day. The upmove seems to be overdone, so the dollar should edge lower on profit taking, but take your cues from the results of the PPI report, which will be finally released on Thursday after several delays.
Euro/dollar reversed all of its gains made on Tuesday and sank back below its 20-day moving average. The pair should attempt to crawl higher on Thursday.
The euro/dollar now faces resistance at 1.2046 and a break higher would signal an upmove to 1.2072. Above 1.2100 there is pivotal resistance at 1.2168. A rally to 1.2215 is unlikely.
The pair has support at 1.1980 and then at 1.1952. Next level comes at 1.1920. A break below 1.1893 would target 1.1840 and then 1.1771.
Oscillators remain mixed.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Mixed to slightly bullish
Dollar/yen made only a modest recovery on Wednesday after the key 109.15 Gann level held,
Any further recovery will encounter into resistance at 110.50 from a Fibonacci retracement level. A break higher would target at 111.20. Distant resistance remains at 111.60 from the 50-point pivot that targets 112.10 and 111.10.
A pullback would test first the support at 109.60 and then the key support is at 109.15 from the 50-point pivot, which targets 109.65 and 108.65. An unexpected break below 108.65 would signal a drop to 108.29. Distant support remains at 107.95 from a Gann 50-point pivot that targets 107.45 and 108.45.
Oscillators are mixed.
Sterling/dollar failed to hold on to its progress to 1.8350 on Wednesday and headed lower, but, helped by its interest rate differential, its decline was muffled.
The pair is toying with the support from the 20-day and the 100-day moving averages at around 1.8250 and then at 1.8225. A break lower would signal a test at 1.8188. Further weakness would then target the support at 1.8117 from a Fibonacci retracement level.
If it can climb back up, sterling/dollar would re-test the resistance at 1.8350. A break higher would call for an upmove at 1.8442 and even challenge the 1.8484 peak. The distant resistance at 1.8511 should not be reached today.
Oscillators are mixed.
MEDIUM-TERM: Slightly higher
LONG-TERM: Slightly higher
Dollar/Swiss franc surged on Wednesday to a three-week high of 1.2701, as it reversed all of its losses made in the previous day. The rally seems to be too much too little, so some profit taking sales should be seen.
The pair has initial support at 1.2624 and break lower would target 1.2560. Dollar/Swiss franc still has a pivotal support at 1.2473.
The initial resistance is at 1.2720 and a break higher would call for further strength at 1.2800. A test of the further resistance at 1.2893 is unlikely.
Oscillators are mixed.
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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