Thursday February 16, 2006 - 13:56:10 GMT
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Daily Forex Market Commentary - 2/16/2006
Daily Forex Market Commentary
Thursday, February 16, 2006 8:00 GMT
By: Cornelius Luca, Currencies Analyst, GFT
The dollar reversed early losses on Wednesday after new Fed Chairman Bernanke made a hawkish report on the economy and implied stronger rates. His comments were more in line with the previous policy rather than hawkish, so the US currency will have to fight hard today to hold on and even pad its gains.
Euro/dollar failed to match the 1 Â½-month low of 1.1858 reached early on Tuesday but managed to post the lowest close of the its short-term downtrend. Once again, the pair remains below the trendline rising since early December, so, once again, expect further weakness this week. But in the short term, it should edge higher on profit taking.
Initial support is pegged to the 1.1850 area. Below this level further support is still seen at 1.1805. Distant support is at 1.1760.
Immediate resistance is at 1.1910. Above 1.1980, expect resistance at 1.2060. The next level is stacked at 1.2105.
Oscillators are falling.
MEDIUM-TERM: Slightly bearish
Dollar/yen spiked down to its lowest level of the February and then made an aggressive recovery to close well in the money. The pair should consolidate on the day.
Initial resistance is at 118.25 from a 50-point pivot, which targets 117.75 and 118.75. Above 119.38, the pair retains good resistance at 119.65 from a 50-point pivot, which targets 119.15 and 120.15.
Below 117.75, the pair has support at 117.40 and 117.10. The next level is 116.85 from another 50-point pivot, which targets 116.35 and 117.35.
Oscillators are mixed.
MEDIUM-TERM: Slightly bullish
Sterling/dollar reversed Tuesdayâ€™s losses, when it coined a 1 Â½-month low of 1.7279, as fears that the Bank of England will cut rates quickly dissipated. It gave up most of the gains and this bodes well four the overall negative outlook.
Initial support is at 1.7360. Below 1.7279 the pair has support at 1.7243. Next support is at 1.7243. Further support lies at 1.7185.
Initial resistance is pegged at 1.7440. Next level is 1.7487. Above 1.7525, the pound has strong resistance at 1.7570.
The oscillators are declining.
Dollar/Swiss franc reversed early to close well in the plus side. While it failed to match the 1 Â½-month high of 1.3136, the pair posted the highest close of the uptrend. Again, expect further general strength, but not before a corrective pullback.
Above 1.3135 gives dollar/Swiss franc has pivotal resistance at 1.3200. Distant resistance is at 1.3280.
Immediate support remains at 1.3060. Below 1.2990 there is support at 1.2900. Only a close below 1.2840 would signal an acceleration of the decline and the pair would challenge the support at 1.2735.
Oscillators are rising.
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