NEWS / Central Banks

Daily Forex Market Commentary for June 5, 2006

Monday, June 05, 2006 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT


The dollar plunged on Friday following the ridiculously weak non-farm payrolls, which was also revised downward for the previous two months. Commodities are on the rise again as spec accounts love to tell us how oil should be above $70 a barrel and reach $100 because of Iran, etc. But markets are expected to stretch, so the buck should get its shins bloodied all over again. The medium-term outlook is actually mixed with downward bias.

Euro/dollar
Euro/dollar surged on Friday.

Above 1.2940, resistance is at 1.2970. The pair would then face further resistance at 1.3030.

Support is seen at 1.2875. Next level is 1.2825 but only a break below 1.2800 would signal a more sustained decline.

Oscillators are rising.

NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Dollar/yen
Dollar/yen??™s almost one-day recovery was obliterated on Friday, when the pair tumbled down.

Immediate support is at 111.60 from a 50-point pivot, which targets 112.10 and 111.10. Next support is at 110.80.

Initial resistance is at 112.10. Key resistance is pegged at 112.90 from a 50-point pivot, which targets 113.40 and 112.40.

Oscillators are declining.

NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish

Sterling/dollar
Sterling/dollar surged on Friday. The overbought pair should see further profit taking sales before any further strength may be seen.

Above the area between 1.8865 and 1.8885, resistance is seen at 1.8910.

Initial support is now seen at 1.8770. Below 1.8730, support comes is at 1.8680 and then at 1.8640.

Oscillators are rising.

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

Dollar/Swiss franc
Dollar/Swiss franc slumped hard on Friday but closed in an inside range on a weekly basis.

Immediate support is seen between 1.2015 and 1.2000. There is a pivotal low at 1.1917.

Initial resistance is at 1.2145. Above 1.2200, strong resistance now comes at 1.2298.

Oscillators are falling.

NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish

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