Daily forex market commentary
The dollar fell further on Wednesday as a mixed CPI report and a soft housing report added ammunition to speculation that the Fed is done with its rate tightening. Again, that’s quite possible, but one month’s report doesn’t make a trend. The decline was more obvious versus the euro and the Swiss franc, and this divergence suggests a likely recovery for the dollar. Wait for confirmation before reversing short positions
Euro/dollar
The euro/dollar rallied further on Wednesday and climbed as high as 1.2865, one of the levels on watch here, before slipping back. The medium-term outlook remains only very cautiously positive.
Above 1.2865 the pair has resistance at 1.2912. Distant resistance looms at 1.2980.
Immediate support is now pegged at 1.2800. That’s followed by 1.2775 and 1.2735. Below the strong area between 1.2690 and 1.2700 there is strong support at 1.2635.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen fell further on Wednesday and retested the strong pivot at 115.50 before trimming losses. Once again, continue playing the Gann pivots, as there is not so much direction right now, so they should give you a few good pointers.
Initial 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.
Above 116.35, good resistance is still seen at 116.85 from another 50-point pivot, which targets 116.35 and 117.35.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
Sterling/dollar
The sterling/dollar rallied on Wednesday as well, but the upmove was not impressive and gave back most of the gains by the end of the day. Once again, it should give it another chance today but I’m not sure it can get too far up from here.
Initial resistance now comes at 1.9020. Above 1.9050, good resistance follows at 1.9127.
Immediate support remains at 1.8890 and that’s followed by 1.8840. Next level is at 1.8765 from a Fibonacci retracement level.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss made fell more aggressively than on Tuesday and smashed below the 60-day moving average, now in the 1.2330 area. It fell to as low as 1.2258 before trimming losses. The slide seems overdone and some recovery seems in order.
Below 1.2258, the pair has support 1.2215. Below 1.2285, the pair now has support at 1.2225. Next level is at 1.2195. There is a distant pivotal low in place at 1.2015.
Immediate resistance is now pegged at 1.2330. Above 1.2370, the pair has resistance at 1.2440. Distant resistance is at 1.2526.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed slightly bullish
LONG-TERM: Bearish
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