Daily Market Commentary

The dollar encountered very choppy reading on Tuesday

Wed, May 7 2008, 06:25 GMT
by Cornelius Luca

Global Forex Trading


The dollar encountered very choppy reading on Tuesday, when it melted versus the commodity currencies, but closed little changed against the majors. The US currency should attempt to advance today.


Euro/dollar

Euro/dollar gave back its early gains to close virtually flat on Tuesday. Thus, my model remains short. The break above 1.5520 amplified the recovery only on in intraday basis. Above 1.5565 resistance is now seen at 1.5600. The euro/dollar has additional resistance at 1.5685. Immediate support is now seen at 1.5515. Below 1.5410, euro/dollar retains support at 1.5360 from a pivot low. Distant support is pegged at 1.5220.

Oscillators are mixed.

NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish


Dollar/yen

Dollar/yen recouped intraday losses accelerated by the break below the 104.50 pivot after failing to dislodge the trendline at 104.03. My model is still long after the semi dark cloud cover failed to work more than on an intraday basis. The immediate risk is on the upside. Immediate resistance is at 105.20. Strong resistance follows at 105.60 from a 50-point pivot that targets 105.10 and 106.10. The next level is at 107.45. Above the 106.75 50-point pivot, which targets 106.25 and 107.25, distant resistance is at 107.95 from another 50-point pivot, which targets 107.45 and 108.45. Initial support is at 104.50 from a 50-point pivot, which targets 104.00 and 105.00. Strong support follows at 103.40 from a 50-point pivot, which targets 102.90 and 103.90.

Oscillators are mixed.

NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish


Sterling/dollar

Sterling/dollar recovered early losses and closed virtually unchanged on Tuesday as well. My model is short, but the risk is on the upside. Initial resistance still comes at 1.9760. Above 1.9885, there is a pivot high at 2.0046. Immediate support is still seen at 1.9655. This is followed by 1.9624. Below 1.9597, distant support is 1.9495.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed


Dollar/Swiss franc

Dollar/Swiss reversed early losses to close basically unchanged on Tuesday. My model is long and the medium-term outlook remains bullish. The short-term outlook is bullish as well. Initial resistance now comes at 1.0550. This is followed by 1.0596. Above 1.0610, distant resistance now comes at 1.0795. Immediate support is now seen at 1.0485. Below 1.0430, the pair has further support at 1.0375. Distant support is then pegged at 1.0255.

Oscillators are mixed.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

Published on  Wed, May 7 2008, 06:32 GMT

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