Dollar/euro rallied on Monday while dollar/yen only marked time as the standard yen crosses and carry trades continued to be lightened. The decent retail sales report briefly underpinned the dollar. Expect more cross-led trading today.
Euro/dollar
The euro/dollar fell to a one-month low on Monday and this is threatening the formation of a double top. A close below 1.3593 would confirm this pattern, which would target 1.3350.
Below 1.3593, initial support comes 1.3560. Strong support follows at 1.3505. A slide to 1.3420 is unlikely today.
Initial resistance is at 1.3640. This is followed by 1.3695. A break above 1.3750 would negate the double top. The pair would then challenge the 1.3839 pivot high.
Oscillators are declining.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Bullish
Dollar/yen
Dollar/yen treaded water on Monday in an inside range and closed unchanged, as all the selling was in commodity and European currencies. A break out of the range is initially needed, with a potential bullish reversal on the back burner for now.
Initial support is at 117.75. The next level is 117.22. Distant support is at 116.35.
The key level is 118.25 from a 50-point pivot that targets 117.75 and 118.75. Above 119.20, resistance is seen at 119.65 from a 50-point pivot that targets 119.15 and 120.15.
Oscillators are mixed.
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Sterling/dollar
Sterling/dollar, which is no longer overbought in the medium term, fell to a five-week low of 2.0086 on Monday and reached a fork in the road. . Take your short-term cue from 2.0105.
If it holds, look for a test of the resistance is at 2.0185. Strong resistance follows at 2.0260.
If it breaks, then immediate support is at 2.0060. A break below this level would signal a further slide to 1.9945. A move below 2 can turn quite aggressive.
Oscillators are declining.
NEAR-TERM: Mixed with bearish bias
MEDIUM-TERM: Mixed with bearish bias
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss surged to its highest level since August 3 and the break on a closing basis above the resistance of the declining trendline at 1.2025 turned the outlook positive.
Initial resistance is at 1.2070. Above 1.2090, the next cap remains at 1.2140. It would take a break above this level to increase the odds that a significant low is in place
Immediate support is at 1.2015. Next level is 1.1950. Below 1.1870, distant support is seen at 1.1819.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed
LONG-TERM: Bearish
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