The sterling and the euro rallied on Wednesday, while dollar/yen rallied and the franc only consolidated. This confirms the attraction of the carry trades and of Europe/yen crosses. Expect more demand for the Europe/yen crosses.
Euro/dollar
The euro/dollar on Wednesday reversed all of the losses made the previous day. It should consolidate today.
Initial resistance is at 1.3825. Above 1.3840, resistance looms at 1.3853 from a pivotal high at 1.3853. Next resistance is pegged at 1.3935.
Good support is at 1.3760. Below this moving average, strong support comes at 1.3705. Next good floor is 1.3625 from the 38.2% Fibonacci retracement level of the June 13 – July 24 leg of the uptrend.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen rallied to a 1 ½-week high on Wednesday, so, proof of its strength is in the bag. The Europe/yen crosses and the carry trades are back in favor and today should see more of this – but at a reduced pace.
Immediate resistance is seen at 119.65 from a 50-point pivot that targets 119.15 and 120.15. Next level is 120.75. Strong resistance follows at 121.05, a 50-point pivot, which targets 120.55 and 121.55.
Below 119.15 there is support at 118.62. Key support level is 118.25 from a 50-point pivot that targets 117.75 and 118.75.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar made an aggressive recovery from a four-week low of 2.0158 and should struggle higher today.
Initial resistance is at 2.0410. If the further 2.0460 area gives way, then look for resistance to emerge at 2.0510.
Significant support is at 2.0305. The next level is at 2.0260. A break below the pivotal level at 2.0182 would signal a further slide to 2.0015.
Oscillators are mixed.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss franc encountered a choppy day of trading on Wednesday but when the dust settled it closed little changed. Thursday should be dominated by consolidation.
Initial resistance is at 1.1995. This level is followed by 1.2025. Above 1.2090, the next cap remains at 1.2140.
Immediate support remains at 1.1915. Below 1.1860, support is seen at 1.1820. Next levels are 1.1788 and 1.1740 from a pivotal low. Strong support follows at 1.1707.
Oscillators are mixed.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
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