Daily forex market commentary
The dollar managed to make the expected upmove on Thursday,
but it wasn’t an easy feat; Germany’s IFO report was strong, while the reports on US durable goods orders and housing were soft. The dollar should probe higher still today. However, remember that the market should only struggle for direction into early September.
Euro/dollar
Euro/dollar failed to sustain early gains provoked by an unexpectedly good reading of the Ifo and sank to a nine-day low. Expect a further choppy decline today.
Immediate support is at 1.2735. Below this level, strong support remains between 1.2690 and 1.2700. Distant support is at 1.2655.
Initial resistance is seen at 1.2800 and then at 1.2835. That’s followed by 1.2900. Above 1.2938, the pair has resistance from a pivotal high at 1.2979.
Oscillators are mixed.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen traded sideways and remained stuck in an inside range again. The direction is unclear, so play the pivots again.
Good resistance remains at 116.85 from another 50-point pivot, which targets 116.35 and 117.35.
Initial support is seen at 116.10 and that’s followed by 115.80. Strong support is at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00. This level also marks the support from a short-term trendline.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
Sterling/dollar
The sterling/dollar continued to swap up and down days and headed lower on Thursday. This would suggest a bounce up on Friday, but sideways trading is favored while the pair remains stuck in an inside range.
Support is initially seen at 1.8870. Further support is at 1.8845. Below 1.8855 support remains at 1.8775.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc reversed early losses and rallied to a nine-day high on Thursday.
Initial resistance is at 1.2396 from a declining trendline, and this should hold on a closing basis. If this line gives way, the pair will rally to 1.2440. Above this level, resistance is still pegged at 1.2520.
Immediate support is at 1.2340 and then at 1.2295. That’s followed by 1.2230. Below 1.2175, which is a long-term Fibonacci retracement level, the pair has support at 1.2095.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
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