Thursday April 6, 2006 - 14:59:40 GMT
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Daily Forex Market Commentary for April 6, 2006
Daily Forex Market Commentary
Thursday, April 06, 2006 8:00 GMT
By: Cornelius Luca, Currencies Analyst, GFT
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The dollar skidded further down versus the euro and the Swiss franc on Wednesday, but recouped losses against the yen and reversed losses versus the pound. There was no reaction to news that the ISM's index of non-manufacturing businesses rose to 60.5 in March from 60.1 in February. Expect further choppy trading today with more risk on the upside.
The euro/dollar marched higher on Wednesday to reach a three-month high of 1.2304. The rally remains excessive and the pair should peak and head lower â€“ at least temporarily.
Initial resistance remains the pivotal high at 1.2322, which pretty much coincides with the target of a bull flag at 1.2330. Above 1.2380, distant resistance is at 1.2450.
Immediate support is at 1.2240. Strong support is still seen at 1.2207. A break below this level signals the return to range trading and the pair would challenge the support at 1.2180 and eventually 1.2115. Only a break below 1.2115 would signal a slide to the 1.2000 area.
Oscillators are rising.
MEDIUM-TERM: Mixed to slightly bullish
Dollar/yen recovered early losses to end virtually unchanged on Wednesday. Expect more consolidation today with upside bias.
Above 117.95, key resistance remains the 50-pip pivot at 118.25, which targets 118.75 and 117.75. There is a pivotal high looming at 119.18.
Initial support is at 117.15. Good support remains at 116.85 from another 50-pip pivot at 116.85, which targets 116.35 and 117.35. Strong support follows at 116.00. Distant support remains at 115.50 from a 50-point pivot.
Oscillators are mixed.
Sterling/dollar spiked up to a one-month high of 1.7615 before plunging on profit taking and on a weak UK economic report. The rally is still overdone, so the pair should pull down again.
Initial support is at 1.7500. A break below this level would target 1.7455. Only a break below 1.7410 would signal a slide to 1.7315, but this is unlikely.
Immediate resistance lies at 1.7560. The big resistance is the pivotal high at 1.7615. Thatâ€™s followed by 1.7665, the 61.8% Fibonacci retracement level of the downtrend between January and March. Intermediate resistance is at 1.7785. Even a close above 1.7615 would trigger an inversed head-and-shoulders that targets the 1.7935 area.
Oscillators are edging higher.
Dollar/Swiss franc sank further on Wednesday and hit a two-month low of 1.2810. Itâ€™s heavily oversold and should now bounce on profit taking.
Immediate resistance is at 1.2890. A break above 1.2965 would signal a recovery to 1.3060. Only a break above 1.3135 would signal that dollar/Swiss franc is starting a new uptrend.
Below the pivotal low of 1.2810, the pair has support at 1.2760. Distant support follows at 1.2700.
Oscillators are declining.
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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