Daily forex market commentary
The dollar rallied broadly versus the European currencies on Tuesday but closed flat against the yen after recouping early losses. The move has been triggered and led by long liquidation of yen crosses. This move should now pause, and this suggest that the dollar will slip against the European currencies. Trading should be choppy.
Euro/dollar
Euro/dollar reversed Monday’s and some of Friday’s gains amid massive sales of euro/yen. The pullback in late trading was made possible by the support from a 50% retracement at 1.2815.
Any further recovery would encounter resistance at 1.2845. Above 1.2880 the pair faces a pivotal high at 1.2939.
Immediate support is now seen at 1.2785. Strong support is at 1.2725. Below the strong area between 1.2690 and 1.2700, support follows at 1.2635
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen’s decline slowed on Tuesday and losses actually were recouped by the close. The pair had slumped on long liquidation of yen crosses the previous day. The pressure should stall today, and initial strength is favored.
Above 116.35, strong resistance is at 116.85 from another 50-point pivot, which targets 116.35 and 117.35.
The pair has initial support at 115.80. Below it, good support remains at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00.
Oscillators are mixed.
NEAR-TERM: Bearish
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
Sterling/dollar
The sterling/dollar fell sharply on Tuesday on liquidation of long sterling/yen positions. It should make a mild recovery before attempting another move down.
Initial resistance is seen at 1.8970. That’s followed by 1.9005 and then by 1.9065. Further resistance comes from a pivotal resistance at 1.9145.
Immediate support is now seen at 1.8910. That’s followed at 1.8855.
Oscillators are edging higher.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc rallied on Tuesday and briefly surpassed the resistance of a trendline at 1.2345. It closed just below it, so we are back to square one.
Above it, resistance is at 1.2365. Above 1.2390, dollar/Swiss franc has resistance at 1.2420 and then at 1.2480. Very strong resistance follows at 1.2510. If 1.2510 crumbles, which would be tough, then look for a test of 1.2580.
Initial support is at 1.2315. Below the strong support at 1.2260, next floor is pegged at 1.2195.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
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