Forex Market Commentary for July 3, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar suffered mostly against the euro and its convenient sub, the franc, but made little progress versus the yen and pound. Today will be a very difficult day, which would suggest at face value more dollar weakness. But both the 25-bp rate hike by the ECB and a weak non-farm payrolls are priced in, and we are facing a short trading day before the Independence Day holiday. Bon chance!
Euro/dollar
The euro/dollar rallied to a 2 ½-month high on Wednesday, ahead of the expected European Central Bank rate hike today. The bias should be on the upside, but the event is already priced in.
Immediate resistance is at 1.5947. Above 1.6020, euro/dollar has additional resistance at 1.6065.
Initial support is now at 1.5865. The next levels are 1.5835 and 1.5795. Below 1.5740, further support remains at 1.5645.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen cannot sustain losses and cannot sustain gains. It closes marginally lower on Wednesday, and my model remains short. Expect more of the same.
Initial support remains at 105.60 from a 50-point pivot that targets 105.10 and 106.10. Distant support is at 104.50 from another 50-point pivot, which targets 104.00 and 105.00.
Above 106.45, strong resistance remains at 106.75 from another 50-point pivot, which targets 106.25 and 107.25. Distant resistance now comes at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar recouped most of its intraday losses, but didn’t make any progress. My model remains long, but choppy trading should persist.
Initial resistance remains at 1.9970. The next level is 2.0010. Above 2.0040, further resistance comes at 2.0145.
Immediate support is still seen at 1.9885. The next level is 1.9800. This is followed by 1.9710.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss closed lower on Wednesday, but didn’t surpass this week’s lows. Again, we need fresh factors before getting out of this sideways market, maybe from the Middle East and maybe from the ECB. The downside should be favored
Immediate support is at 1.0105. Below 1.0075, support is still seen at .9996.
Initial resistance is now seen at 1.0185. This is followed by 1.0230. Above 1.0295, resistance is at 1.0345 and 1.0390.
Oscillators are declining.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Mixed
LONG-TERM: Bullish