Wednesday July 21, 2004 - 15:51:03 GMT
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Daily Forex Commentary by Global Forex Trading
Daily Commentary By Cornelius Luca, forex analyst, Global Forex Trading
The dollar on Tuesday was able to further trim its big losses made on Friday, and this recovery was helped by Fed Chairman Greenspan’s optimistic testimony on the economy and his inference that the tightening cycle might accelerate. However, this upmove seems overdone, so the dollar’s recovery should stall and the market should turn sideways.
Euro/dollar fell sharply on Tuesday and challenged the support at 1.2300.
For this decline to continue, the pair must break and close below the support of the 20-day moving average, now in immediate vicinity, at around 1.2294. Below 1.2270, support comes at 1.2243. A break lower would call for a decline to 1.2190. A slide to 1.2140 is unlikely.
If unable to break below 1.2290-1.2300, the euro/dollar will climb back up and test the resistance at 1.2390. There is a pivotal resistance level at 1.2460. Next barrier remains 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.
Oscillators are edging lower.
NEAR-TERM: Mixed to slightly lower
Dollar/yen struggled higher on Tuesday, as expected, but remained confined to Monday’s range of 108.08 to 108.85. Only a break higher would re-invigorate this pair.
Above 108.85, key resistance remains 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 mixed.
MEDIUM-TERM: Slightly bearish
Sterling/dollar fell further on Tuesday but, despite violating the bottom of its rising channel, the pair still needs to confirm this decline.
This confirmation would only come from the break below the good support at 1.8570 and that would signal a decline to 1.8500. There still is a pivotal support in the 1.8474 area.
Above 1.8637, the pair still has resistance at 1.8732 and a break higher signals a test of the 1.8769 pivotal top.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Slightly bullish
Dollar/Swiss made a powerful recovery on Tuesday and exited from Friday’s range of 1.2230 – 1.2391. The close above its 20-day moving average at around 1.2380 adds to the bid tone.
The pair has resistance at 1.2482 and a break higher would target 1.2548 and. There is a pivotal high at 1.2674, but dollar/Swiss franc should not stretch that high on the day.
If the recovery runs out of gas, then the dollar/Swiss franc will fall to test the support at 1.2380. A break lower would 1.2310. Below 1.2230 there is the pivotal support at 1.2204. The key level on the downside remains the target of a head-and-shoulders pattern at 1.2160.
Oscillators are rising.
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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