Tuesday May 11, 2004 - 14:23:58 GMT
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Daily Forex Market Commentary Tuesday, May 11, 2004 from GFT
Daily Commentary By Cornelius Luca, GFT (source: http://www.gftforex.com)
The dollar extended its strong gains on Monday, particularly against the yen. However, the extensive losses suffered in the stock markets and the inability to hold on to its profits versus the European currencies raise a cloud of doubt over immediate gains on Tuesday.
Euro/dollar rebounded on Monday from a low of 1.1810 to end the day with only minor losses. While it remains under overall selling pressure, the pair should attempt to crawl higher on the day.
Any recovery should hit immediate resistance at 1.1891 and then at 1.1921. If it continues to strengthen, expect once again a test of the strong resistance from the 200-day moving average at 1.1967. An unexpected break higher would likely accelerate the upmove to 1.2000. Further resistance remains at 1.2076.
Below 1.1810 the pair would slump to test the support at 1.1759. A break below this level would signal a move down to the support area at 1.1695 and then at 1.1600.
Oscillators are edging lower.
Dollar/yen soared further on Monday to reach an eight-month high of 114.12. This unexpectedly powerful rally was stopped for now by a Fibonacci retracement level.
Above this top, key resistance comes at 114.20 from a 50-point pivot, which targets 113.70 and 114.70. Distant resistance looms at 115.50 from another 50-point pivot that targets 115.00 and 116.00, but these lofty levels should not be seen.
Dollar/yen now finds support at 112.90 from the 50-point pivot that targets 113.40 and 112.40. Below a Fibonacci retracement level at 112.06 there is strong support at 111.60 from the 50-point pivot that targets 112.10 and 111.10.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bullish
Sterling/dollar fell further on Monday, but once again the rate hike on Thursday cushioned its slide. This meant that the pair failed to penetrate the support at 1.7700 and trimmed its losses. It should hold below the 20-day moving average at 1.7844, but it should try to further chip away at its losses on Tuesday.
Initial resistance comes at 1.7810 and a break higher targets 1.7875. A break higher would signal an unexpectedly strong recovery to 1.7950 and even 1.8016.
Below 1.7700 there is support at 1.7660, and a break lower would signal a decline to the pivotal support at 1.7580.
Oscillators are mixed.
Dollar/Swiss franc advanced to its highest levels seen since April 29, but by the end of the day, it slumped into negative territory. When is said and done, it remains clear that the pair still needs to move away from the gravity force of its 20-day moving average, now at around 1.2981.
Above 1.3022, the pair has good resistance at 1.3072 and a break higher signals an upmove to 1.3100. Further strength would target 1.3160 and then the pivotal resistance at 1.3226.
Dollar/Swiss franc has initial support at 1.2980 and a break lower would target 1.2882 and then at 1.2803.
Oscillators are edging higher.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Mixed to slightly bullish
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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