Tuesday May 1, 2007 - 14:00:24 GMT
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Daily Forex Market Commentary for May 1, 2007
GFT Daily Forex Market Commentary for May 1, 2007
Forex Market Commentary by Cornelius Luca, Currencies Analyst, GFT
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The Middle Eastern religious fervor is threatening the future of the secular Turkey and that had a short impact on the dollar early Monday. Some emerging currencies may get hurt in line with the Turkish lira, but thatâ€™s wrong, as only Turkey is facing religious extremism. The US data was mixed on Monday, but bottom line is that the economy is dragging along. Unless the US equities melt on Tuesday, as the daily chart warns, the dollar should attempt to recover today. Volume may suffer from the May Day holiday in Europe.
The overbought euro/dollar traded sideways in an inside range and closed little changed after nailing an 11 Â½-year high on Friday. Again, it must take advantage quickly of its bullish momentum to extend gains at these high levels or risk aggressive sales.
Immediate resistance remains at 1.3705. Above 1.3735, resistance comes at 1.3805.
There is initial support at 1.3615. A break below 1.3575 would signal a test of the good support at 1.3525.
Oscillators are rising.
Dollar/yen traded sideways on Monday as well and still needs a reason to exit from a range bordered by two Gann pivots at 119.65 and 118.25.
Resistance remains at 119.65 from another 50-point pivot that targets 119.15 and 120.15. Distant resistance now comes 120.75.
Below 118.85, strong support is still seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Oscillators are mixed.
Sterling/dollar traded in an inside range on Monday and is now at a crossroads: itâ€™s either breaking higher and starts an aggressive bullish flag or edges lower and continue to trade in its short term declining channel â€“ but within the major uptrend.
Strong support is at 1.9935. A close below this level would signal that the trendline is broken and the Cableâ€™s uptrend is in trouble. It would then challenge the 1.9850 area.
Initial resistance is at 2.0035. A close above it would suggest the start of the bullish flag. Above 2.0070, resistance remains between 2.0131 and 2.0151.
Oscillators are mixed.
Dollar/Swiss franc traded sideways and in an inside range on Monday but remains under medium-term selling pressure.
Immediate support is at 1.2035 and thatâ€™s followed by 1.2015. Below 1.1996 there is a key level at 1.1945.
Initial resistance is at 1.2105. A break above the further resistance at 1.2145 would signal a more sustained recovery. The next level is 1.2200.
Oscillators are declining.
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bearish
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