Daily forex market commentary
The dollar rallied across the board on Tuesday, as the market lacks much direction or impetus. The rally was helped by a slide in the euro following weak regional data: the ZEW index of German institutional and analyst expectations unexpectedly plummeted to a five-year low. The dollar strength shouldn’t last much longer, as the market will continue struggling for direction for another two weeks or so.
Euro/dollar
One day after rallying to a 2 ½-month high of 1.2938, euro/dollar fell sharply and gave back all of its gains. The slide was helped by the terrible ZEW report. Look for further choppy trading.
Immediate support is now seen at 1.2770. Below 1.2740, strong support is seen between 1.2690 and 1.2700.
Initial resistance is at 1.2835. That’s followed by 1.2900. Above 1.2938, the pair has resistance from a pivotal high at 1.2979.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen managed to break out an inside range on its way to a four-week high of 116.82. If you follow the Gann pivots here, you know why it stopped in this area. Only a break above it would sanction a sustained upmove.
Good resistance is seen at 116.85 from another 50-point pivot, which targets 116.35 and 117.35.
Initial support is seen at 116.35. That’s followed by 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 headed lower on Tuesday, as expected, and erased about half of its Monday’s gains.
Support is first seen at 1.8800. Further support comes at 1.8765 from a Fibonacci retracement level. Distant support is at 1.8675.
Initial resistance now comes at 1.8930 and then 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
One day after sinking to a 1 ½-month low of 1.2182, dollar/Swiss franc rallied and erased all of these losses. The bottom of its medium-term triangle helped. Expect choppy trading today after two volatile days that amounted to nothing net-net.
Initial resistance is at 1.2360. Above 1.2380, distant resistance is now pegged at 1.2440.
Immediate support is at 1.2295. That’s followed by 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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