Daily forex market commentary
The dollar fell sharply on Monday versus the European currencies, hitting new lows for the downtrend against the euro and the franc, but managed to trim losses and closed flat versus the yen. There was no fundamental trigger, but stronger commodities helped the decline. The weakness is unlikely to persist, but take some clues from the ZEW report.
Euro/dollar
The euro/dollar profited of the 20-day moving average support and rallied to a 2 ½-month high of 1.2938 on Monday. However, only a close on a weekly basis above the resistance of a long-term trendline declining since December 31, now at 1.2868, will turn the outlook aggressively positive.
Immediate support is now pegged at 1.2855. Below 1.2800, a floor remains at 1.2740. Strong support is then seen between 1.2690 and 1.2700.
Initial resistance is at 1.2900. Above 1.2938, the pair has resistance from a pivotal high at 1.2979. Further resistance remains at 1.3030 and then at 1.3067.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen traded sideways on Monday as well and remained in an inside range.
Above 116.35, good resistance remains at 116.85 from another 50-point pivot, which targets 116.35 and 117.35.
Initial support is seen at 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. Distant support is at 114.20 from a 50-point pivot, which targets 113.70 and 114.70.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
Sterling/dollar
The sterling/dollar rallied on Monday, as expected. It briefly punctured the resistance of its trendline, but closed below. Only a clear break above it would signal sustained strength. So for now, the downside is favored.
Support is first seen at 1.8870. Further support comes at 1.8800 and 1.8765 from a Fibonacci retracement level. Distant support is at 1.8675.
Initial resistance now comes at 1.8960. That’s followed by 1.9000. Strong resistance follows at 1.9050. Above 1.9080, good resistance follows at around 1.9145.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss fell sharply on Monday and hit a 1 ½-month low of 1.2182. A close below 1.2175 would trigger a quasi head-and-shoulders formation, but this is unlikely.
Good resistance is at 1.2290 and that’s followed by 1.2340. Above 1.2380, distant resistance is now pegged at 1.2440.
Immediate support is at 1.2230. Below 1.2175, which is a long-term Fibonacci retracement level, the pair has support at 1.2095. There is a distant pivotal low in place at 1.2015.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
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