Daily Forex Market Commentary for June 23, 2006

Friday, June 23, 2006 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT

The dollar rallied with a vengeance on Thursday to more than reverse Wednesday??�s losses. Dollar/yen managed to close most of its gap and some strength should be seen today as well.

Euro/dollar
Euro/dollar fell sharply on Thursday after failing to challenge the key 1.2700 level.

Tough support looms between 1.2550 and 1.2529 and only a break below. A break below this area would signal a slide to 1.2445. Distant support lies at 1.2415.

Resistance is seen at 1.2440 and then at 1.2675. Only a break above1.2700 would confirm the end of the decline. The pair would then fly to 1.2750 on short covering. Next stop would be 1.2805. Distant resistance is at 1.2979.

Oscillators are mixed.

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

Dollar/yen
Dollar/yen rallied to a two-month high on Thursday. Expect another attempt higher today, but the upside looks limited.

Above 116.60, resistance follows at 116.95. Strong resistance follows at 117.50. A rally to 118.25 is unlikely.

Immediate support now comes at 115.50. Below 115.00, support is pegged at 114.20, a 50-pip pivot that targets 113.70 and 114.70.

Oscillators are mixed.

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

Sterling/dollar
Sterling/dollar tumbled on Thursday to its lowest levels since May 2, to smash the pivotal low at 1.8315 and to test the bottom of its declining channel. It??�s now on the edge of the knife at 1.8260.

If 1.8260 breaks, then look for a further slide to 1.8200. Below 1.8145 the pound has support at 1.8070.

If 1.8260 holds, then look for a recovery to 1.8375. Above 1.8460, distant resistance is at 1.8590.

Oscillators are mixed.

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

Dollar/Swiss franc
Dollar/Swiss franc reversed the losses made on Tuesday and Wednesday to reach its highest levels since May 2. It??�s probing the top of its rising channel, so odds are it will peak soon and pull back down.

Above 1.2444, resistance is now seen at 1.2480. A break above the latter level would confirm the return to sideways trading and the pair would then challenge 1.2555.

Initial support is at 1.2375. Tough support follows between 1.2300 and 1.2290 and a break below this area would signal a further slide to 1.2207. Strong support lies at 1.2125.

Oscillators are mixed.

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

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