GFT Daily Market Commentary
Forex Market Commentary for August 21, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar generally consolidated on Wednesday, but reversed early losses against the Swiss franc in part because the Russia-Georgia war is not fanning out. Commodities are looking to bounce, while the US equity indices somehow advanced despite concern that Fannie Mae and Freddie Mac might need to be rescued by the weekend. Summer doldrums? The UK will release its retail sales report today, but given the excessive decline in the previous reading, the risk is on the upside. On our side of the pond, only the Philly Fed survey is of interest. The outlook for the dollar is mixed.
Euro/dollar
Euro/dollar was all over the place on Wednesday and my model remains very close to reversing its short position since July 22. The immediate risk is higher, but the market needs new direction.
Above 1.4805, good resistance remains at 1.4845. This is followed by 1.4900 and 1.4950.
Initial support is still seen at 1.4714. Below 1.4640, further floors are seen at 1.4600, 1.4505 and 1.4440.
Oscillators are mixed.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen consolidated in an inside range but closed basically unchanged. My model remains short. The initial risk remains on the downside.
Initial support is seen at 109.55. Strong support remains at 109.15 from a 50-point pivot, which targets 109.65 and 108.65.
Above 109.95, strong 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 declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
The oversold sterling/dollar basically repeated Tuesday’s range, and despite its close at the lowest level of the downtrend, formed yet another potential bullish reversal. With the UK retail sales possibly making a mild recovery, the immediate risk is on the upside.
Initial resistance now comes at 1.8670. The next level is 1.8722. Above 1.8786, distant resistance is pegged at 1.8867.
Below the immediate support at 1.8560, a pivot low remains 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 reversed expected early losses to coin a fresh high for the uptrend and my model reversed its daylong short position. The immediate risk is slightly on the upside – only very slightly.
Immediate resistance moves to 1.1040. Above 1.1105, resistance remains at 1.1185.
Initial support is now at 1.0945. The next strong level is at 1.0880. Below 1.0855, support remains at 1.0800.
Oscillators are mixed.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM:
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