Daily Forex Market Commentary
The dollar gave back some of its gains versus the pound, most of the profits against the euro and the franc, and actually fell versus the yen. More reports tell us that the US economy is relatively in a better shape than the rest of the world and this supports the dollar. But it's a game of crosses, with the European currencies being sold against the yen. These should be the core trades.
Euro/dollar
The euro/dollar fell to a near eight-month low but recovered and closed above the trendline support rising since October 2006. My model remains short. The pair should attempt extending its decline.
Immediate support is at 1.4445. Below the pivot low at 1.4386, further support is seen at 1.4365 and 1.4265. Distant support is seen at 1.3935.
Initial resistance is at 1.4572. The next level is 1.4600. Above 1.4725, distant resistance is at 1.4780 from the 0.786% retracement of the upmove between February and July.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Cross trading, especially GBP/JPY pushed dollar/yen down on Wednesday, but the pair was stuck in an inside range. My model remains short below 108.90. Sideways trading should continue.
Strong support is at 107.95 from a 50-point pivot, which targets 107.45 and 108.45. Distant support follows at 106.54.
Immediate resistance is at 108.80. Good resistance is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Next strong resistance is at 110.35 from a 50-point pivot, which targets 109.85 and 110.85.
Oscillators are mixed.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar remains in a free-fall and sank further on Wednesday to a near 2 1/2-year low. Again, there is little reason to expect the selling pressure to stop.
Below 1.7668, support remains at 1.7630. Below 1.7590, distant support is at 1.7420.
Initial resistance is still seen at 1.7800. The next level is 1.7910 from the 0.786% retracement of the upmove between November 2005 and November 2007. Distant resistance is at 1.7965.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss reached a fresh eight-month high on Wednesday before giving up all of its gains. It formed a possible bearish reversal pattern and is overbought, but take profit only on a confirmation. The medium-term outlook remains positive – and so does my model. Again, after some early profit taking, the upmove should resume.
Initial resistance comes at 1.1140. The next levels are 1.1170 and 1.1270. Distant resistance looms at 1.1360.
Immediate support is pegged at 1.1035. This is followed by 1.1010, 1.0950 and 1.0890. Distant support remains at 1.0725.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Cornelius Luca
Global Forex Trading
http://www.gftforex.com
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