Daily Market Commentary

The dollar rallied on Tuesday as the crude oil slumped about 2.5%

Wed, May 28 2008, 07:28 GMT
by Cornelius Luca

GFT (Global Forex Trading)


The dollar rallied on Tuesday as the crude oil slumped about 2.5%, and the upmove was remarkable given the soft US data. The US currency should attempt another upmove today if the oil inventory report doesn’t surprise with a decline.


Euro/dollar

The euro/dollar had an outside day but sank to a near one-week low and my model went short. Following another decline today, the medium-term upmove should resume. Key support remains at 1.5655. A close below this level would signal a sustained decline and the next level would become 1.5610. This is followed by 1.5570 and 1.5460. Initial resistance is now seen at 1.5740. The next level is 1.5811. Above 1.5865, euro/dollar has distant resistance at 1.6020.

Oscillators are mixed.

NEAR-TERM: Slightly bearish
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bullish


Dollar/yen

Dollar/yen rallied on Tuesday, but remained stuck in an inside range. My model went long. Expect another attempt on the upside today. Immediate resistance is now at 104.38, which is the top of the inside range. Strong resistance follows at 104.50 from a 50-point pivot, which targets 104.00 and 105.00. Below 103.80, key support is at 103.40 from a 50-point pivot, which targets 102.90 and 103.90. A bid support is seen at 102.30 from another 50-point pivot, which targets 101.80 and 102.80.

Oscillators are rising.

NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bullish
LONG-TERM: Bearish


Sterling/dollar

Sterling/dollar failed its aggressive decline and reduced losses on the close on Tuesday. My model remains long, but the risk is on the downside. Immediate support is at 1.9760. This is followed by 1.9645. Only a break below 1.9545 would jeopardize the cable’s recovery. Initial resistance remains at 1.9850. Above it, there is further resistance at 1.9910. Distant resistance is at 2.0030.

Oscillators are mixed.

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


Dollar/Swiss franc

Dollar/Swiss rallied on Tuesday, but my model remains barely short. The immediate outlook is bullish. Initial resistance now comes at 1.0370. If 1.0410 gives way, expect a test of 1.0510 and even of the distant resistance at 1.0623. Immediate support is now seen at 1.0305. This is followed by 1.0200, 1.0130 and 1.0105.

Oscillators are rising.

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

Published on  Wed, May 28 2008, 07:36 GMT

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