Daily Forex Market Commentary
Cross trading dominated Friday’s market, as well, with the pound and the yen lower, and the Aussie and Kiwi higher. The euro and the franc traded sideways. The data was mixed, with retail sales sliding and the U of Mich survey surging. The US currency is oversold, but buy it only on a stop-loss order basis. Better yet, stick to cross trading.
Euro/dollar
The overbought euro/dollar climbed to a marginally new lifetime high giving up most of its gains. Since there was no corrective decline in sight, just hold long positions with profit taking on a stop. Immediate resistance is now seen at 1.3814. A break above it would signal a further aggressive rally to 1.3887. Initial support is at 1.3745. Below the strong support at 1.3665, there is a distant level at 1.3570.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen slipped on Friday on profit taking. It should consolidate today and should remain under pressure versus the European and the commodity currencies. Initial support is 121.60. 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. The key resistance is 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: Mixed to slightly higher
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar encountered choppy trading on Friday as well and carved out a new 26 1/4-year high. Hold long positions with a trailing stop, as the pair is severely overbought. Above 2.0366 there is resistance is at 2.0430. Distant resistance looms at 2.0530. Immediate support is still seen at 2.0280. Next level is at 2.0200. Only a break below 2.0150 on a closing basis would signal a more sustained decline, but this is unlikely.
Oscillators are rising.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc made a marginally new low for the year on Friday. The medium-term outlook is still negative, but some recovery is possible today. Initial support is seen at 1.1986 from a pivot low. 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: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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