GFT Daily Market Commentary
The dollar had something of a siesta day on Monday after being sold off aggressively a day earlier on the weak jobless report. It still fell against the euro and the franc, but recouped its losses against the pond and then yen. With San Francisco Fed President Yellen saying that the recent market turmoil adds to risk for the economy, the dollar has more room on the downside.
Euro/dollar
The euro/dollar rallied on Monday as well. It is still probing a weak resistance line declining since July 24 in the 1.3800 area and a close above it is needed to warrant more strength.
So, above 1.3800, resistance remains at 1.3853 from a pivotal high. Next resistance is pegged at 1.3935.
Below 1.3720, euro/dollar now has support at 1.3635. Only a break below 1.3600 would signal the resumption of the downmove.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/yen
Dollar/yen recovered from a new three-week low on Monday. Following a bounce, this weakness should spillover to late this week and probably beyond.
Initial support still comes at 112.90 from a 50-point pivot that targets 113.40 and 112.40. Next strong follows at 111.60 from another 50-point pivot, which targets 112.10 and 111.10.
Immediate resistance is seen at 114.20 from another 50-point pivot that targets 113.70 and 114.70.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar rallied to a marginally new four-week high of 2.0330 on Monday. By now it recovered 61.8% of the downmove between July 23 and August 17. A close above 2.0322 is needed to confirm further strength for this high-yielding currency.
Above 2.0330, strong resistance follows at 2.0400. If the resistance at 2.0470 gives way, look for distant resistance at 2.0530.
Immediate support is seen at 2.0200. A break below the 2.0145 level would signal a further slide to 2.0000.
Oscillators are rising.
NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Bearish
LONG-TERM: Bullish
Dollar/Swiss franc
Dollar/Swiss sank to a new one-month low on Monday. the close below 1.1917 confirms further weakness.
Below 1.1840, support is now seen at 1.1819. Next levels are 1.1788 and 1.1740 from a pivotal low.
Above 1.1880, resistance is at 1.1920. This is followed by 1.2025.
Oscillators are bearish.
NEAR-TERM: Mixed with downside bias
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
By: Cornelius Luca, Currencies Analyst, GFT
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