Forex Market Commentary for August 15, 2007 by Cornelius LucaGFT Daily Forex Market Commentary
Dollar/Europe surged further on Tuesday while dollar/yen declined. Once again, the standard yen crosses and the carry trades fell victim to long liquidation. Meanwhile, the flames of the subprime fire are spreading quickly and furiously. On this backdrop, the PPI and the trade deficit readings were ignored. Expect more cross-led trading today, as the crisis continues.
Euro/dollar
The euro/dollar fell to a 1 1/2-month low on Tuesday and formed a double top, which targets 1.3350. Following a mild bounce, the sell-off should continue.
Below 1.3505, support comes at 1.3487. The next support is at 1.3430. Outside 1.3350, distant support is at 1.3264.
Initial resistance is at 1.3555. The next level is 1.3600. This is followed by 1.3640 and 1.3695. A break above 1.3750 would negate the double top, but this is unlikely.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell while still in an inside range but closed at the lowest level since March 28. The selling was driven by sales in commodity and European currencies. A break out of the range is needed for the next direction.
Initial support is at 116.85 from a 50-point pivot that targets 116.35 and 117.35. Distant support is at 115.50.
Initial resistance is at 117.45. The key level is 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar collapsed to a 1 ½-month low on Tuesday and broke below 2.0105 on its way back to the sub 2 mark. More weakness is in store, especially after the break below the trendline at 1.9935.
Immediate support is at 1.9903. Below 1.9880 there is support at 1.9807. Next big level is only 1.9750!
Initial resistance is at 2.0015. Strong resistance is now seen at 2.0100. Next level is perched at 2.0185. Distant resistance follows at 2.0260.
Oscillators are declining.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss on Tuesday surged to its highest level since July 27. A significant low is in place and this strength should continue.
Initial resistance is at 1.2145. The next cap moved up to 1.2225. Distant resistance is at 1.2305.
Immediate support is at 1.2070. Next level is 1.2015. Distant support is seen at 1.1950.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Mixed with upside bias
LONG-TERM: Bearish