| Forex Market Commentary for June 16, 2008 by Cornelius Luca GFT Daily Market Commentary
The dollar rallied broadly on Friday as well ahead of the G8 meeting, but late sales in the European currencies avoided the break of significant technical levels. With the G8 meeting out of the way, the US currency should decline first and then attempt to rally again. With the G8 central banks mum on the dollar, the US currency should head lower. There is a chance of a rally in euro/sterling due to a possible M&A.
Euro/dollar
The euro/dollar recovered from a five-week low on Friday to close just above the important 1.5380 level. My model remains short, but if this level holds, the pair could mount a nice rally.
Immediate support is still seen at 1.5380. Below 1.5340, support comes at 1.5287. Distant support moved to 1.5230.
Immediate resistance remains at 1.5460. The next level us 1.5525. Above 1.5590, euro/dollar has strong resistance at 1.5645. Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied to a four-month high and triggered a long-term bullish flag. My model remains long.
Above 108.60, resistance is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Above 109.93, distant resistance is perched at 110.35 from another 50-point pivot, which targets 109.85 and 110.85. Initial support is seen at 107.95 from a 50-point pivot, which targets 107.45 and 108.45. Next strong level is at 106.75 from another 50-point pivot, which targets 106.25 and 107.25. Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar recovered from a one-month low to close flat on Friday. My model remains short, but the short-term outlook is mixed.
Immediate support remains at 1.9434. The next level is 1.9365. Further support comes at 1.9335. Distant support is at 1.9235. Above 1.9525, strong resistance is still seen at 1.9575. Further resistance is perched at 1.9716.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss rallied to a four-week high On Friday. The model is long. The pair has been alternating up and down weeks for seven weeks, and if the lack of direction continues, this week should be the down week. Only a close above 1.0548 signals further strength, but the start of a massive bullish flag is less likely at this point.
Immediate support is now seen at 1.0375. This important level is followed by 1.0310. Distant support is at 1.0200.
Initial resistance now comes at 1.0500. Key resistance is at 1.0548. This is followed by 1.0622.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
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