GFT Daily Forex Market Commentary

Forex Market Commentary for August 8, 2007 by Cornelius LucaGFT Daily Forex Market Commentary

Sterling led the European currencies lower on Tuesday, as expected, while the dollar slipped against the yen. This confirms the significance of cross trading these days, but alternating up and down days do not make anyone’s life easy. The Fed didn’t offer any hope for he doves, so the rate should remain at 5.25 percent for the balance of the year. Expect more pressure on the European currencies and on the dollar/yen.

Euro/dollar
The euro/dollar fell further on Tuesday after nailing a 13-day high a day earlier. More pressure is likely today.

Good support is at 1.3725. Below this level 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.

Initial resistance is at 1.3785. Above 1.3840, resistance looms at 1.3853 from a pivotal high at 1.3853. Next resistance is pegged at 1.3935.

Oscillators are mixed.

NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen edged lower on consolidation after making a spectacular recovery a day earlier. So, more proof of its strength is needed.

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.
Key support level is 118.25 from a 50-point pivot that targets 117.75 and 118.75. Below 117.20, distant support is at 116.85 from a 50-point pivot that targets 116.35 and 117.35.

Oscillators are falling.

NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Sterling/dollar

Sterling/dollar fell on Tuesday as well, and the weak BRC sales accelerated its losses. It looks even more like a potential bearish flag but more proof is needed.
Significant support is at 2.0182. A break below this pivotal level would signal a further slide to 2.0015. The target of the bearish flag would be the 1.9900 area.

Initial resistance is at 2.0260. The distant 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.

Oscillators are falling.

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

Dollar/Swiss franc

Dollar/Swiss franc recovered further to take back 38.2% of the losses since July 25. The recovery should last today as well.
Initial resistance is at 1.1990. This is followed by 1.2025. Above 1.2090, the next cap remains at 1.2140.
Immediate support is at 1.1915. 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 mixed.

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