Forex Market Commentary for August 7, 2007 by Cornelius Luca
GFT Daily Forex Market Commentary
The dollar reversed early losses to close higher on Monday and the recovery was obvious mostly against the pound and the yen. Expect more of the same today if the US equity indices can hold on to their recovery.
Euro/dollar
The euro/dollar fell from a 13-day low on Monday and the overbought pair looks poised for another decline today. After this pullback, the upmove should continue in a halting manner.
Good support is at 1.3755, and this is your line in the sand. Below 1.3725, strong support comes at 1.3705. Next good floor is 1.3625 from the 38.2% Fibonacci retracement level of the June 13 – July 24 leg of the uptrend.
Above 1.3840, resistance looms at 1.3853 from a pivotal high at 1.3853. Next resistance is pegged at 1.3935.
Oscillators are rising.
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen gapped down on the open on Monday tot its lowest level in four months but then managed to reverse losses and closed higher. More proof of its strength is needed. Overall, the selling pressure should continue this week as well. But Tuesday should see some strength. Key level is 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Immediate resistance is at 118.75. Above 119.20, resistance is seen at 119.65 from a 50-point pivot that targets 119.15 and 120.15.
Initial support is 117.75. Below 117.20, the next level is 116.85 from a 50-point pivot that targets 116.35 and 117.35.
Oscillators are falling.
NEAR-TERM: Bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar fell on Monday also under the pressure of a weak industrial production report. It looks a lot like a potential bearish flag but more proof is needed.
Immediate and significant support is at 2.0260. A break below this level would signal a further slide to 2.0182. The target of the bearish flag would be the 1.9900 area.
The resistance at 2.0355 would have to break to signal a quick turnaround. If the further 2.0460 area gives way, then look for resistance to emerge at 2.0510. Further resistance is at 2.0585.
Oscillators are falling.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc suffered more losses early on Monday and its subsequent recovery was not aggressive enough. Following a brief recovery the selling pressure should resume.
Initial resistance is at 1.1910. This is followed by 1.1950 and 1.2025. Above 1.2090, the next cap remains at 1.2140.
Below 1.1860, support is seen at 1.1820. Next levels are 1.1788 and 1.1740 from a pivotal low. Strong support follows at 1.1707.
Oscillators are falling.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bearish