GFT Daily Market Commentary

Forex Market Commentary for August 7, 2008 by Cornelius LucaGFT Daily Market Commentary

The dollar continued to rally on Wednesday, as a significant low is in place. The European, commodity currencies and the yen are sinking amid aggressive long liquidation. The dollar should march higher today as well, but the pace of the upmove should decelerate.

Euro/dollar

The euro/dollar fell on Wednesday as well and another weak report added insult to injury; German manufacturing orders fell 2.9% in June and the May decline was revised lower.
Again, following some early recovery, the major decline should resume.

Initial support now comes at 1.5399. Further support follows at 1.5305. Distant support now moved to 1.5240.

Immediate resistance is at 1.5450. This is followed by 1.5515. Above the strong level at 1.5580, distant resistance moved down to 1.5630l.

Oscillators are declining.

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

Dollar/yen

Dollar/yen exploded to a seven-month high on Wednesday and the uptrend was resuscitated. The upside is only slightly favored today and an initial pull back is likely.

Support moved up to 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Distant support follows at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.

Immediate resistance moved up to 109.65. Strong resistance is at 110.60. The next resistance is at 111.00. Distant resistance is at 112.05.

Oscillators are rising.

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

Sterling/dollar

Sterling/dollar collapsed for a fourth consecutive day on Wednesday, and news that UK consumer confidence encountered the largest drop since the Nationwide Building Society survey began in May 2004. Again, following an early bounce, the pound should see more weakness.

Immediate support is now seen at 1.9460. This is followed by 1.9410. Distant support is now seen at 1.9365.

Initial resistance now comes at 1.9520. The next level is 1.9585. Above 1.9630, the next significant level is pegged at 1.9760.

Oscillators are falling.

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

Dollar/Swiss franc

Dollar/Swiss rallied further to a three-month high on Wednesday. Again, following some pullback, the uptrend should resume.

Above 1.0622, resistance moved up to 1.0675. This is followed by 1.0790.

Initial support is now seen at 1.0560. This is followed by 1.0480, 1.0435 and 1.0405. Distant support now comes at 1.0370.

Oscillators are rising.

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