Daily forex market commentary
The dollar rallied against the European currencies and trimmed losses versus the yen on Thursday after San Fran Fed’s Yellen noted increased bias for another rate hike. Dollar/yen had initially declined because a German finance official said the yen weakness would be discussed at a G7 meeting this month. The dollar should remain in favor for at least part of Friday.
Euro/dollar
Euro/dollar fell to its lowest levels since August 15 and is approaching critical levels. Further selling pressure must be warranted by a break of the support from a 50% retracement at 1.2700.
A break below 1.2700 would signal a bearish reversal pattern that ultimately targets the 1.2465 area. Strong support follows at 1.2635. Distant support is now at 1.2520.
Any further recovery would encounter resistance at 1.2755. Further resistance is at 1.2845. Above 1.2880 the pair faces a pivotal high at 1.2939.
Oscillators are declining.
NEAR-TERM: Mixed to slightly lower
MEDIUM-TERM: Mixed
LONG-TERM: Bullish
Dollar/yen
Dollar/yen recovered early losses but made little progress on Thursday.
Strong resistance remains at 116.85 from another 50-point pivot, which targets 116.35 and 117.35. Distant resistance is at 117/90.
The pair has initial 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.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish
Sterling/dollar
The sterling/dollar fell sharply for the third consecutive day to an over one-month low. Once again, it should make a mild recovery before attempting another move down. The pair is on the verge of forming a major double top formation — provided that 1.8741 breaks on a closing basis.
Below 1.8750, support is now seen at 1.8670. That’s followed by 1.8575.
Initial resistance is seen at 1.8810. The next level at 1.8875 is followed by 1.8920 from a Fibonacci retracement level and then by 1.8960.
Oscillators are declining.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc rallied again on Thursday to reach a near 1 ½-month high. Once again, following a brief pullback, it should try to add to its gains.
Resistance is seen between 1.2485 and 1.2490. Above this area, dollar/Swiss franc has resistance at 1.2540 and then at 1.2580.
Initial support is at 1.2405. Below the strong support at 1.2390, next floor is now seen at 1.2320.
Oscillators are rising.
NEAR-TERM: Bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
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