Forex Market Commentary for August 11, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar exploded higher very early on Friday and accelerated these gains throughout the day and early Monday. Again, the European and commodity currencies remain under pressure amid long liquidation. Following some minor correction, the dollar should advance further.
Euro/dollar
The euro/dollar collapsed to a 5 ½-month low. The close below 1.5316 confirmed a double top targeting the 1.4600 area. My model remains short since July 22.
Initial support is at 1.4910. Below 1.4860, distant support now comes at 1.4735.
Immediate resistance is seen at 1.5000. The next levels are 1.5065 and 1.5110. Distant resistance is at 1.5200.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen surged to an eight-month high on Friday and my model remains long. The pair slipped in early trading but the Gann pivot at 110.35 still rules and this will give you direction this week as well.
Strong support is now pegged at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Strong support follows at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.
So, immediate resistance is now at 110.35 from my 50-point pivot, which targets 109.85 and 110.85. The next key level is 111.60 from another 50-point pivot, which targets 112.10 and 111.10.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar fell for the sixth consecutive day and the intense pressure burst the bottom of a triangle and took it to the lowest levels since November 2006. It is targeting the bottom of its channel declining since November 2007, which is at 1.8940. Cable formed a long-term head-and-shoulders pattern that targets the 1.7550 area.
Immediate support is at 1.9145. Below the strong support at 1.9100, further supports are seen at 1.8940 and 1.8900.
Initial resistance now comes at 1.9190. Above 1.9270, further resistance comes at 1.9325 and 1.9420.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss rallied for the fourth consecutive week, but that was extremely aggressive and reached a 5 ½-month high. My model remains long. All eyes are on the channel line at 1.0935.
Immediate resistance is at 1.0855. Above 1.0905, key resistance comes at 1.0935. This is followed by 1.1055.
Initial support is pegged at 1.0755. Below 1.0725, support is now seen at 1.0620 and 1.0505.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed