Forex Market Commentary for August 28, 2007 by Cornelius LucaGFT Daily Market Commentary
The dollar edged up against the European commodity currencies and slipped versus the yen in a market slowed by the London bank holiday. The yen crosses took some mild pressure but it’s too early to call for a significant decline. Trading should remain a tad lighter ahead of the long weekend, but the yen crosses shouldn’t waste much time before turning up again.
Euro/dollar
Euro/dollar edged lower on Monday on profit taking after surging on Friday. It remains overbought in the short term, so the initial bias is lower.
Below 1.3610, euro/dollar has support comes at 1.3555. A break below the latter level would signal the resumption of the downmove, but this is unlikely. Next level is at 1.3480.
Initial resistance is at 1.3690. This is followed by 1.3775. Above the weak trendline at 1.3820, resistance looms at 1.3853 from a pivotal high.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen declined on Monday but remained in an inside range. The selling pressure should subside at around 115.50.
Si, initial support is at 115.50 from another 50-point pivot, which targets 115.00 and 116.00. A break below 115.00 would complicate the positive medium-term outlook.
Immediate resistance is at 116.40. Strong resistance is at 116.85 from a 50-point pivot that targets 116.35 and 117.35. Above 117.68 there is good resistance at 118.25 from another 50-point pivot, which targets 117.75 and 118.75.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar made the expected upmove early in the morning, when it nailed a two-week high of 2.0192, and then it reversed these gains. The initial bias is down, but a break below 2.0065 would get us more excited.
Thus, immediate support is at 2.0065. A break below the 1.9920 level would signal a further slide to 1.9780.
Initial resistance is at 2.0140. Above 2.0192, strong resistance follows at 2.0290. If the resistance at 2.0400 gives way, look for distant resistance at 2.0530.
Oscillators are mixed.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc trimmed some of the losses incurred on Friday. Expect some consolidation and then more weakness.
Initial resistance is at 1.2065. This is followed by 1.2110 and 1.2140.
Immediate support is at 1.1995. Below 1.1870, support is seen at 1.1819. Next level is 1.1788.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish