Daily Forex Market Commentary
The dollar tumbled across the board on Friday following the weak non-farm payrolls and the sliding US stock amid the widening subprime crisis. Following a brief recovery, the US currency should fall further.
Euro/dollar
The euro/dollar rallied last Friday to its highest level since July 25 and that was enough to recover most of the losses incurred only a week earlier. This means that those losses, which had erased 38.2% of the up leg since June 13, were only profit taking. After a mild pullback, the upmove should continue in a halting manner.
Above 1.3819, resistance looms at 1.3853 from a pivotal high at 1.3853. Next resistance is pegged at 1.3935.
Below 1.3725, strong support comes at 1.3705. Next good floor is 1.3625 from the 38.2% Fibonacci retracement level of the June 13 — July 24 leg of the uptrend.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen consolidated sank to close on Friday at its lowest level in four months. This is the fourth consecutive week of losses and the selling pressure should continue this week as well.
Initial support is 117.60. Next level is 116.85 from a 50-point pivot that targets 116.35 and 117.35.
Immediate resistance is at 118.25 from a 50-point pivot that targets 117.75 and 118.75. Above 119.20, resistance is seen at 119.65 from a 50-point pivot that targets 119.15 and 120.15.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
The sterling/dollar struggled higher on Friday as well. The initial bias is still upward.
If the resistance at 2.0460 gives way, look for resistance to emerge at 2.0510. Further resistance is at 2.0585.
Immediate support is at 2.0380. A break below this level would signal a further slide to 2.0290. A close below the pivotal low at 2.0182 would signal that a peak is in place.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc sank to the lowest levels since April 2005 on Friday after consolidating in the previous two weeks. Following a brief recovery the selling pressure should rekindle.
Below 1.1870, support is seen at 1.1830. Next levels are 1.1788 and 1.1740 from a pivotal low. Strong support follows at 1.1707.
Initial resistance is at 1.2090. Above 1.2090, the next cap remains at 1.2140. It would take a break above this level to increase the odds that a significant low is in place.
Oscillators are falling.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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