Daily Forex Market Commentary for July 6, 2006

Thursday, July 06, 2006 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT

The dollar rallied sharply on Wednesday after a private report estimating that US companies added the most jobs in June since at least 2001 fueled speculation that non-farm payrolls on Friday will be strong and that the Fed will hike rates again in August.
It should attempt to pad its gains, but the pace should decelerate before the release of the real employment data on Friday.

Euro/dollar
Euro/dollar fell sharply from a new high for the uptrend at 1.2838 early on Wednesday but erased less than half of Friday??�s gains and 38.2% from the upmove since the previous Monday.

Below 1.2710, next support lies at 1.2670 from a Fibonacci retracement level. Further support lies at 1.2610.

Immediate resistance is at 1.2760. Further resistance remains at 1.2850 and 1.2919.

Oscillators are mixed.

NEAR-TERM: Mixed with a bearish bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/yen
Dollar/yen rallied on Wednesday to erase 61.8% of the losses registered since last Thursday.

Key level is 115.50, from a 50-pip pivot, which targets 116.00 and 115.00. Strong resistance comes at 116.00. Next levels are 116.58 and 116.75.

Immediate support is at 115.20 and 115.00. That??�s followed by 114.50. Strong support follows at 114.20 from a 50-point pivot that targets 113.70 and 114.70.

Oscillators are mixed.

NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

Sterling/dollar
Sterling/dollar is still alternating up and down days and Wednesday was indeed the expected down day. The pair remains in an inside range and the outlook remains guardedly bearish.

Below 1.8320 there is support at 1.8240. Strong support then lies at 1.8210 and 1.8170.

Initial resistance is at 1.8420. Next level is 1.8470. Above 1.8500, resistance comes at 1.8565 from the 50% mark of the downtrend between May and June. Strong resistance follows at 1.8630.

Oscillators are mixed.

NEAR-TERM: Mixed with a bearish bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss franc reversed losses after sinking very early on Wednesday to a new low for the downtrend at around 1.2200.

If it can vault over Wednesday??�s high of 1.2356, the pair would challenge the resistance at 1.2375 and then at 1.2405. Further resistance looms at 1.2455.

Support comes first at 1.2275. Below 1.2210, further support is pegged at 1.2150 from a short-term Fibonacci retracement level. Next good level comes at 1.2075.

Oscillators are mixed.

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

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