Tuesday May 2, 2006 - 14:02:44 GMT
Share This Story
GFT - www.gftforex.com
Daily Forex Market Commentary for May 2, 2006
Tuesday, May 02, 2006 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT
Visit GFT to learn more
The dollar hit the skids again for most of the day on Monday, despite a series of strong US reports. However, the oversold currency was helped later in the day by news that Fed Chairman Bernanke meant to say that he is flexible on rates. The downtrend remains in place, but odds are that Tuesday will see the US currency recover â€“ buy only if the rally is confirmed. Once it turns, the recovery can be aggressive.
The euro/dollar rallied to a new high for the downtrend of 1.2690 on Monday but slipped to unchanged levels late in the day. The pair is very overbought and formed a bearish reversal. The long-term outlook is bullish, so donâ€™t sell it before confirmation is in place.
Key support is seen at 1.2445. A break below this trendline support would signal a further decline to a Fibonacci retracement level at 1.2415. Further support looms at 1.2340.
Immediate resistance is at 1.2615. Thatâ€™s followed by 1.2650 and 1.2680. Further resistance comes from the area between 1.2750 and 1.2775.
Oscillators are rising.
NEAR-TERM: Mixed with downside risk
Dollar/yen sank further and reached a low of 112.32 on Monday, before recouping most of its losses. The short-term bias of the oversold pair is on the upside.
Initial resistance is at 113.80. Good resistance is pegged at 114.20 from a 50-point pivot that targets 113.70 and 114.70. Above 115.05, strong resistance comes from the 115.50 from a 50-point pivot that targets 115.00 and 116.00.
The pair has immediate support at 112.90 from a 50-point pivot; targets 113.40 and 112.40. Further support comes at 111.50.
Oscillators are mixed.
NEAR-TERM: Mixedto slightly bullish
MEDIUM-TERM: Slightly bearish
The overbought sterling/dollar surged to a new uptrend high at 1.8414 on Monday, but late trading forced it to give up most of its gains. The overbought pair should see some profit taking sales before the uptrend resumes, but wait for a confirmation of this weakness.
Initial support is at 1.8195. The next level is 1.8150. Below 1.8105, next level is at 1.8015.
Immediate resistance is seen at 1.8300. Above 1.8425, the pound faces resistance at 1.8500.
Oscillators are mixed.
MEDIUM-TERM: Slightly bullish
Dollar/Swiss franc fell further to a new low for the downtrend of 1.2183 on Monday, but profit taking finally took some toll, and the gains evaporated. The oversold pair, should attempt a further recovery before resuming its downtrend, but donâ€™t buy before some confirmation is in place.
Initial resistance is at 1.2490 and then at 1.2520 from a Fibonacci retracement level. Next levels are 1.2560 and 1.2600.
Immediate support is seen at 1.2290 â€“ 50 percent of the uptrend between December 2004 and November 2005. Next level is 1.2240.
Oscillators are falling.
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.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."