Forex Market Commentary for August 20, 2008 by Cornelius LucaGFT Daily Market Commentary
The dollar took a beating on Tuesday amid rising oil prices and sliding equity prices, and the weak US housing and the high PPI reports only added to concern. The next several days will be trying for the US financial sectors, so this turned the outlook for the dollar more bearish. No US economic reports are due today.
Euro/dollar
Euro/dollar rallied on Tuesday and my model is very close to reversing its short position since July 22. The immediate risk is higher.
Good resistance now comes at 1.4845. This is followed by 1.4900 and 1.4950.
Initial support is seen at 1.4714. Below 1.4640, further floors are seen at 1.4600, 1.4505 and 1.4440.
Oscillators are mixed.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen fell for the second day on Tuesday and my model went short. The initial risk remains on the downside.
Initial support is seen at 109.55. Strong support is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65.
Above 109.95, strong resistance remains at 110.35 from my 50-point pivot, which targets 109.85 and 110.85. The next key level remains 111.60 from another 50-point pivot, which targets 112.10 and 111.10.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
The oversold sterling/dollar formed another potential bullish reversal near the low for the downtrend. The immediate risk is on the upside.
Initial resistance still comes at 1.8700. Above 1.8786, further resistance comes at 1.8867.
Below the immediate support at 1.8624, there is a pivot low at 1.8514. Further supports are seen at 1.8480 and 1.8405.
Oscillators are mixed.
NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc fell sharply from a new high for the uptrend and my model reversed its long position since July 22. The immediate risk remains on the downside.
Initial support is now at 1.0880. Below 1.0855, support moved to 1.0800 (very strong) and 1.0725.
Immediate resistance remains at 1.0960. Above 1.1008, resistance comes at 1.1055 and 1.1185.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed