Forex Market Commentary for July 23, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar surged on Tuesday in part because Treasury Secretary Paulson paid lip service for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised. Alternating up and down days make it difficult to stay long on a position. The medium-term outlook remains bearish for the dollar, but the Fed fear of inflation could translate in a more sustained upmove.
Euro/dollar
Euro/dollar fell to a 12-day low this my model went short. The medium-term outlooks are bullish, but with this choppy market, the downside seems favored on the day – it only seems that way because despite the slide on Tuesday, there is strong support at 1.5755.
If the initial support at 1.5755 gives way, look for support at 1.5700. Strong support follows at 1.5660. The next good level is at 1.5610.
Immediate resistance is seen at 1.5820. The next levels are 1.5860 and 1.5943. A pivot high follows at 1.6036.
Oscillators are falling.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen reversed early losses and rose to a near two-week high after breaking the declining trendline. The short-term outlook is only slightly positive because there is more significant trendline declining since late December.
Above this line at 107.57, resistance follows at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
Initial support is again at 106.75 from a 50-point pivot, which targets 106.25 and 107.25. Below 105.85, distant support is at 105.60 from a 50-point pivot that targets 105.10 and 106.10.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar is still alternating up and down days, with Tuesday a big down day, so Wednesday should see at least some recovery! My model went short, but there is strong support nearby.
Immediate support is seen at 1.9880. The next strong level is 1.9845. Below the trendline at 1.9815, support is seen at 1.9760.
Initial resistance now comes at 1.9965. Above 2.0005, the next level is 2.0085. A pivot high follows 2.0155.
Oscillators are falling.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss reversed losses and surged on Tuesday, prompting my responsive model to go long. The risk is on the upside today, but should not be easy.
Immediate resistance is at 1.0355. Above 1.0390, resistance now comes at 1.0450. This is followed by 1.0540.
Initial support is only seen at 1.0245. Below 1.0200, support now comes at 1.0138 and 1.0100.
Oscillators are rising.
NEAR-TERM: Up to slightly bullish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Mixed