Forex Market Commentary for August 12, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar traded on cue on Tuesday, declining in early trading and then marching higher. The European and commodity currencies remain under pressure amid long liquidation and you should expect more of the same today. The US trade data will reflect old high oil prices and show a bigger deficit than the current situation.
Euro/dollar
The euro/dollar sank to a new low for the downtrend. The pair is on its way to the target of a double top in the 1.4600 area. My model remains short since July 22.
Initial support is at 1.4860. Below 1.4735, distant support now moved to 1.4440.
Immediate resistance is seen at 1.4910. Above 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 remain at an eight-month high and my model remains long. But the pair didn’t run any further on Monday. The Gann pivot at 110.35 still rules and this will give you direction this week as well.
So, immediate resistance remains 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.
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.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar dug to a new low for the downmove and the selling pressure should persist. It is still targeting the bottom of its channel declining since November 2007, which is at 1.8940. Cable remains on track for the target of a long-term head-and-shoulders pattern that targets the 1.7550 area.
Immediate support is at 1.9050. Further supports are seen at 1.8940 and 1.8900.
Initial resistance now comes at 1.9120. Above 1.9170, further resistance comes at 1.9270, 1.9325 and 1.9420.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss rallied to a new high for the uptrend and tested the top of the rising channel. My model remains long since July 22. All eyes are on the channel line at 1.0935.
Immediate resistance is at 1.0935. Above it, key resistance comes at 1.1055. This is followed by 1.120o.
Initial support is pegged at 1.0865. 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