Daily Forex Market Commentary
The dollar slipped only briefly early Monday on profit taking and the decline was helped by news the US current-account deficit widened to a record $225.6 billion last quarter from $217.1 billion in the second quarter. It then gave back gains to close little changed on Monday. Again, following some pull back on profit taking, the dollar should attempt a final rally.
Euro/dollar
The euro/dollar fell to a 25-day low of 1.3051 on Monday but then recouped losses to close virtually unchanged. A significant peak is in place and the pair should make a further decline in the medium term. But the pair is oversold in the short term, so it should first edge higher.
Above the very strong 1.3130 level, euro/dollar has resistance at 1.3180, 1.3230 and then at 1.3290.
Only a break of the support at 1.3055 on a closing basis would accelerate the decline. Euro/dollar then has support at 1.2985.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Bullish
Dollar/yen
Dollar/yen encountered choppy trading and got stuck in an inside range on Monday. However, the upside remains cautiously positive.
The pair should challenging the resistance at 118.75, which is the target of the 118.25 pivot. Next level is now the 50-point pivot at 119.65, which targets 116.15 and 120.15.
Below 117.75, there is support at 117.10. A break above this strong level would test the 50-point pivot at 116.85, which targets 116.35 and 117.35.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar made yet another mild decline on Monday and hit a three-week low. It closed marginally below 1.9500 and this suggests a continuation of the decline. However, the odds are that the pair will consolidate today.
Below 1.9432, support comes at 1.9410. Strong support remains at 1.9335 from a Fibonacci retracement level.
Initial resistance is at 1.9560. Above 1.9610, the pair has resistance at 1.9675 from a Fibonacci retracement level.
Oscillators are declining.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss franc rallied further on Monday and reached a 25-day high before giving up of its gains. It should attempt to climb higher today as well, despite being overbought in the short term. The pair formed an inversed head and shoulders, which targets the 1.2310 area.
Above the Fibonacci retracement level at 1.2266, the pair has resistance at 1.2310 and 1.2330.
Immediate support is at 1.2184. That is followed by 1.2130 and 1.2090.
Oscillators are rising.
NEAR-TERM: Mixed with bullish bias
MEDIUM-TERM: Mixed with bullish bias
LONG-TERM: Mixed
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