Forex Market Commentary for July 19, 2007 by Cornelius LucaGFT Daily Forex Market Commentary
The dollar held on to its overnight losses on Wednesday in the wake of Bear Stearns’ reports of large hedge fund losses. Lehman nixed rumors of the same fate, but the US equity markets didn’t fare well. The mixed US data and Bernanke’s statement didn’t do much for the dollar. The US currency should remain under pressure and keep an eye on the Philly Fed report – the market has a negative bias for the dollar.
Euro/dollar
The euro/dollar held on to its early gains in Asia, when it nailed to a new lifetime high. Hold long positions with profit taking only a stop.
Immediate resistance is still seen at 1.3887. A break above it would signal a further aggressive rally to 1.3910 and 1.3945. Distant resistance is at 1.3990.
Initial support is at 1.3785. The next level is 1.3745. Below the strong support at 1.3665, there is a distant level at 1.3570.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell on Wednesday. It should consolidate today.
Initial support remains at 121.50. There is a 50-point pivot at 121.05 and this targets 120.55 and 121.55. Strong supports follow at 120.89 and 120.65.
Immediate resistance is at 122.20. The key resistance remains at 122.50 from a 50-point pivot, which targets 122.00 and 123.00.123.55. Above the key resistance at 122.50 from a 50-point pivot, which targets 122.00 and 123.00, distant resistance comes at 123.65.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar held on to its gains at a 26 1/4-year high on ongoing expectations that the BoE may hike its base rate one more time, even though not anytime soon. Hold long positions with a tight trailing stop.
Above 2.0550 there is resistance at 2.0615. Distant resistance looms at 2.0720.
Immediate support is seen at 2.0475. Next levels are 2.0405 and 2.0375. Strong, but distant, resistance is at 2.0250.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc remains week after falling to a new low of the downtrend. The medium-term outlook is negative, and some weakness is possible today as well.
Initial support is seen at 1.1960. Next level is 1.1910. Distant support follows at 1.1883.
Above 1.2068, resistance is seen at 1.2100. Next level comes at 1.2175. Distant resistance is at 1.2235.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish