GFT Daily Market Commentary

[GFTforex]

Forex Market Commentary for August 19, 2008 by Cornelius LucaGFT Daily Market Commentary


The dollar consolidated near its high price versus the European currencies but fell against the yen on Monday. This means the euro/yen cross fell further as expected. Following a pullback today, the dollar should attempt to push further up. But the market needs to pick up volatility if such a rally is to occur.


Euro/dollar


Euro/dollar consolidated in a tight range and made little progress on Monday. The pair remains on track of a double top targeting the 1.4600 area and my model remains short since July 22, but the market lost momentum early in the week. The immediate risk is higher.

Good resistance remains at 1.4755. This is followed by 1.4832 and 1.4950.

Initial support is seen at 1.4640. Below the target at 1.4600, support now comes at 1.4505 and 1.4440.

Oscillators are declining.


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


Dollar/yen


One day after nailing a high for the year, dollar/yen pulled back on Monday as expected, and came very close to turning my model short. The Gann pivot at 110.35 will continue to give direction, and the initial risk is still on the downside.

Initial support is seen at 109.65. Strong support is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65.

Immediate resistance remains at 110.35 from my 50-point pivot, which targets 109.85 and 110.85. The next key level remains 111.60 from another 50-point pivot, which targets 112.10 and 111.10.

Oscillators are mixed.


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


Sterling/dollar


Sterling/dollar marked time further on Monday after coining a new low for the downtrend. The selling pressure should pause today as well as cable remains oversold in the short term. The immediate risk is higher. In the medium term, cable remains on track for the target of a long-term head-and-shoulders pattern that targets the 1.7550 area.

Initial resistance still comes at 1.8700. Above 1.8786, further resistance comes at 1.8867.

Below the immediate support at 1.8624, there is a pivot low at 1.8514. Further supports are seen at 1.8480 and 1.8405.

Oscillators are mixed.


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


Dollar/Swiss franc


Dollar/Swiss franc consolidated just below the high for the uptrend but didn’t cut any new path on Monday. My model remains long but the immediate risk remains on the downside.

Initial support is pegged at 1.0940. Below 1.0890, support is now seen at 1.0855 and 1.0725.

Immediate resistance remains at 1.1008. Above 1.1055, key resistance comes at 1.1185.

Oscillators are mixed.


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