Daily forex market commentary
The dollar closed down across the board after a choppy session on Tuesday, after the FOMC minutes showed that the Fed officials’ decision to suspend its rate tightening cycle was a close call and that they were unsure whether they would further raise borrowing costs. The US currency had managed to actually rally earlier that day, even though the consumer confidence fell to 99.6 in August from 107.0 in July. The dollar slide was overdone and it should attempt to recover today.
Euro/dollar
Euro/dollar made an aggressive recovery on Tuesday from a three-day low in the aftermath of the Fed minutes. There was little reason for this rally, so be prepared for an attempt to pullback sometime on Wednesday.
Initial resistance is now seen at 1.2845. That’s followed by 1.2875 and 1.2900. Above 1.2938, the pair has resistance from a pivotal high at 1.2979.
Immediate support is at 1.2815. That’s followed by 1.2748, but this level should not be seen today. Below the1.2715 level, strong support remains between 1.2690 and 1.2700. Distant support is at 1.2655.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen saw more weakness on Tuesday, but once again remained stuck in an inside range. It must break out this range of 116.40 to 117.39 before new positions should be put on. The downside looks more vulnerable, of course, but volume is light these days, so anything goes.
The pair has support at 116.35. Below 115.80, good support remains at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00.
Initial resistance is at 116.85 from another 50-point pivot, which targets 116.35 and 117.35. Further resistance looms at 117.75. Good resistance is still seen at 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
Sterling/dollar
The sterling/dollar rallied further on Tuesday and finally broke out of an inside range on its way to a 19-day high of 1.9026 before peaking. The rally was overdone and it would take a break above this level to assure further strength.
Above 1.9026, resistance comes at 1.9095. Distant resistance is now pegged at 1.9145.
Support is initially seen at 1.8960. The next level is 1.8915. That’s followed at 1.8865. Distant support is at 1.8780.
Oscillators are edging higher.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc fell further on Tuesday and nailed a one-week low of 1.2268 before trimming losses. The decline was overdone, so the downside should be limited.
Below the pivotal support between 1.2268 and 1.2255, Distant support is at 1.2182.
Above 1.2315, dollar/Swiss franc sees resistance at 1.2345. Strong resistance follows at 1.2375 and at 1.2420. Distant resistance follows at 1.2510.
Oscillators are edging lower.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
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