Daily Forex Market Commentary
The dollar marched lower on Monday as well, closing down versus the European currencies but up against the yen. The weakness should temper today, as oversold conditions increase, and the dollar may see some mild recovery.
Euro/dollar
Euro/dollar rallied extended its gains on Monday to a new high for the uptrend. The medium-term outlook clearly remains positive – but the short term is mixed.
Initial resistance is seen at 1.3165. Above 1.3220, resistance comes at 1.3270. Next strong resistance is naturally pegged at 1.3370.
Below 1.3100, the pair retains support at 1.3045. Only a close below 1.2980 would signal a significant decline to 1.2860.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
The dollar/yen recovered from a new 2 1/2-month low on Monday to close marginally higher. The medium-term outlook remains negative but in the short-term the pair is heavily oversold. All eyes are on the head-and-shoulders formation, which targets the 113.30 area.
The pair should be capped at 116.85 by a 50-point pivot, which targets 116.35 and 117.35.
Below the 50-pip pivot at 115.50, which targets 116.00 and 115.00, dollar/yen has support at 114.20 from another pivot, which targets 113.70 and 114.20.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Barish
LONG-TERM: Bearish
Sterling/dollar
Sterling/dollar surged on Monday to a new 11-month high, and the medium-term outlook remains positive.
Above 1.9460, good resistance is at 1.9515. There is a medium-term bullish flag that targets the 1.9640 area. Next level is 1.9712.
Initial support comes at 1.9300. 1.9270 and 1.9250 follow that.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc fell sharply on Monday as well and hit a new 5 ½-month low. The medium-term outlook remains negative.
Below 1.2026, support is seen at 1.1921 from a pivot low. There is distant support at 1.1790.
Initial resistance is at 1.2085. Above 1.2135, next levels are at 1.2160 and 1.2200. Further resistance is pegged at 1.2245.
Oscillators are falling.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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