Daily Forex Market Commentary
The dollar had a mixed day on Tuesday, as expected, as cross trading dominated the market. The pound and the Aussie advanced, the yen declined, while the euro and the franc marked time. The US data was mildly supportive for the US currency, with the core PPI up 0.3 percent, the industrial output up 0.5 percent and net overall capital inflows up to $105.9 billion in May. The dollar then sank in Asia after Bear Stearns reported large hedge fund losses that suggest a slide in the equity markets.
Euro/dollar
The overbought euro/dollar again consolidated quietly on Tuesday but rallied in Asia to a new lifetime high. Hold long positions with profit taking only a stop.
Immediate resistance is still seen at 1.3887. A break above it would signal a further aggressive rally to 1.3910 and 1.3945. Distant resistance is at 1.3990. Initial support is at 1.3785. The next level is 1.3745. Below the strong support at 1.3665, there is a distant level at 1.3570.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied on Tuesday. It should fall today.
Initial support is 121.50. There is a 50-point pivot at 121.05 and this targets 120.55 and 121.55. Strong supports follow at 120.89 and 120.65. Immediate resistance is at 122.20. The key resistance remains at 122.50 from a 50-point pivot, which targets 122.00 and 123.00.123.55. Above the key resistance at 122.50 from a 50-point pivot, which targets 122.00 and 123.00, distant resistance comes at 123.65.
Oscillators are mixed.
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar advanced to a new 26 1/4-year high following a report that annual inflation exceeded the Bank of England’s 2 percent target for a 14th month in June. The BoE may have to hike is base rate one more time, but not anytime soon. Hold long positions with a tight trailing stop. Above 2.0525 there is resistance at 2.0615. Distant resistance now looms at 2.0720. Immediate support is now seen at 2.0475. Next levels are 2.0405 and 2.0375. Strong, but distant, resistance is at 2.0250.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc fell to a new low of the downtrend. The medium-term outlook is still negative, but some weakness is possible today as well. Initial support is seen at 1.1960. Next level is 1.1910. Distant support follows at 1.1883. Above 1.2068, resistance is seen at 1.2100. Next level comes at 1.2175. Distant resistance is at 1.2235.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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