Tuesday July 20, 2004 - 12:58:35 GMT
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Daily Forex Commentary by Global Forex Trading
Daily Forex Market Commentary Tuesday, July 20, 2004 8:00 GMT
Daily Commentary By Cornelius Luca, forex analyst, Global Forex Trading
The dollar trotted in place on Monday versus the European currencies but sank deeper against the yen. The dollar should try to further trim its big losses made on Friday, but Tuesday there will be two significant factors that might turn into market movers; the first is Germany’s July ZEW index and the main one is Fed Chairman Greenspan’s semi-annual testimony. Expect Greenspan to reiterate a measured pace of rate tightening if inflation allows it.
Euro/dollar fell on Friday from a marginally new four-month high of 1.2460 but managed to recoup most of its losses.
Below 1.2390, support remains at 1.2345. Pivotal support is still seen at 1.2300.
Above 1.2460, the euro/dollar still has resistance at 1.2480 from the 61.8 percent Fibonacci retracement level of the February – April downtrend. A break above this level would signal an upmove to 1.2537. Distant resistance comes at 1.2684.
Oscillators are rising.
NEAR-TERM: Mixed to slightly lower
Dollar/yen fell on Monday to a one-week low of 108.08 and this was in line with the candlestick chart’s sell signal. The move is overdone and the pair should now attempt trimming some of these losses
Any recovery will have to deal with the resistance from the 200-day and 20-day moving averages between 108.50 and 108.60. Key resistance then looms at 109.15 from the pivot that targets 109.65 and 108.65. A break to the 110.00 area remains difficult.
Key support remains from the 107.95 50-point pivot, which targets 107.45 and 108.45. Below 107.00, dollar/yen still faces support at 106.75 from a 50-point pivot that targets 106.25 and 107.25.
Oscillators are falling.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Slightly bearish
Sterling/dollar fell on Monday from a new five-month high of 1.8769 but the pair still remains on track to a short-term bull flag, which targets 1.9242.
Above 1.8769, the pair still has resistance at around 1.8850 and a break higher signals a rally to 1.8944.
The pair has good support at 1.8570 and a break lower would signal a decline to 1.8500. There is a pivotal support in the 1.8474 area.
Oscillators are rising.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Slightly bullish
Dollar/Swiss edged higher on Monday and trimmed some of its recent losses, but still needs to exit from Friday’s ample range of 1.2230 – 1.2391 before new positions will be set.
The pair has resistance at 1.2358 and a break higher would target 1.2387 and 1.2804. That’s followed by 1.2440.
Below 1.2230, the dollar/Swiss franc has support at 1.2204 and then at 1.2182. A break lower would reach the target of a head-and-shoulders at 1.2160. If this level is surpassed, then look for a test of the further support from a multi-year low at 1.2138.
Oscillators are falling.
NEAR-TERM: Mixed to slightly higher
DISCLAIMER: This forum and the information provided here should not be relied on as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. The views of the author are not necessarily those of Global Forex Trading, its owners, officers, agents or employees. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Cornelius Luca will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Cornelius Luca do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.
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