Cross trading dominated Monday’s market as well, with the pound, the Aussie and the loonie higher, and the euro, yen and the franc marking time. The strong Empire report helped the oversold US currency trim losses. Again, buy the dollar only on a stop-loss order basis and try sticking to cross trading.
Euro/dollar
The overbought euro/dollar consolidated quietly below Friday’s marginally new lifetime high. Since there was no corrective decline in sight, just hold long positions with profit taking on a stop.Immediate resistance is still seen at 1.3814. A break above it would signal a further aggressive rally to 1.3887. Initial support remains at 1.3745. Below the strong support at 1.3665, there is a distant level at 1.3570.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen recovered from a three-day low to close unchanged on Monday. It should consolidate today and should
remain under pressure versus the European and the commodity currencies.Initial support is 121.60. There is a 50-point pivot at 121.05 and this targets 120.55 and 121.55. Strong supports follow at 120.89 and 120.65. The key resistance is 122.50 from a 50-point pivot, which targets 122.00 and 123.00.123.55. Above the key resistance at 122.50 from a 50-point pivot, which targets 122.00 and 123.00, distant resistance comes at 123.65.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar spiked up to a new 26 1/4-year high of 2.0403 on Monday. Once again, hold long positions with a trailing stop, as the pair is severely overbought.Above 2.0403 there still is resistance at 2.0430. Distant esistance looms at 2.0530. Immediate support is seen at 2.0305 and then at 2.0280. Next level is at 2.0200. Only a break below 2.0150 on a closing basis would signal a more sustained decline, but this is unlikely.
Oscillators are rising.
NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc reversed early losses on Monday but held near Friday’s low for the year. The medium-term outlook is still negative, but some recovery is possible today as well.Above 1.2068, resistance is seen at 1.2100. Next level comes at 1.2175. Distant resistance is at 1.2235.Initial support is seen at 1.1986 from a pivot low. Distant support follows at 1.1883.
Oscillators are falling.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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