Forex Market Commentary for May 9, 2008 by Cornelius LucaGFT Daily Market Commentary

The dollar rallied versus the European currencies but sank versus the yen. The US currency should edge lower today, but the overall risk in on the upside.

Euro/dollar

Euro/dollar sank to a two-month low on Thursday before recovering to close flat. There is a risk of an intermediary bullish reversal (hammer) and Friday will be the day to happen. My model remains short and the medium-term outlook is bearish.
Immediate support is now seen at 1.5360. The pair has a pivot low at 1.5287. Below 1.5200, euro/dollar would test support at 1.5115. Distant support is pegged at 1.5040.

Initial resistance is now seen at 1.5455. The euro/dollar then retains additional resistance at 1.5515,1.5600 and 1.5685.
Oscillators are bearish.

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

Dollar/yen

Dollar/yen fell sharply while taking its cues from the 103.40 and 104.50. My model went short and this is OK unless 104.50 goes.

Strong support is pegged at 103.40 from a 50-point pivot, which targets 102.90 and 103.90. Distant support is at 101.85.
Immediate resistance moved to at 104.50 from a 50-point pivot, which targets 104.00 and 105.00. Strong resistance follows at 105.60 from a 50-point pivot that targets 105.10 and 106.10.
Oscillators are mixed.

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

Sterling/dollar

Sterling/dollar consolidated near a 2 ½-month low. My system remains short, but the short-term outlook is slightly bullish.

Initial resistance still comes at 1.9585. Above 1.9690, there is distant resistance at 1.9840.
Below 1.9495, support remains at 1.9410. This is followed by 1.9363. Distant support looms at 1.9185.

Oscillators are declining.

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

Dollar/Swiss franc

Dollar/Swiss fell from an over two-month high to close lower on Thursday. My model is long and the medium-term outlook remains bullish. But the pair is overbought and the short-term outlook is slightly bearish.

Immediate support is now seen at 1.0440. Below it, the pair has further support at 1.0375. Distant support is then pegged at 1.0255.
Initial resistance now comes at 1.0545. This is followed by 1.0622. Distant resistance remains at 1.0795.
Oscillators are mixed.

NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bullish
LONG-TERM: Beari



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