Monday August 7, 2006 - 13:49:59 GMT
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Daily Forex Market Commentary for August 7, 2006
Daily Forex Commentary for August 7, 2006
by: Cornelius Luca, Currencies Analyst, GFT
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The dollar collapsed across the board on Friday following the disappointing US unemployment data. The market probably overreacted and the dollar is oversold in the short term, but the medium-term outlook is bearish.
The overbought euro/dollar rallied sharply on Friday and hit a near two-month high of 1.2908. The pair is overbought in the short term but the medium-term outlook is positive.
Above 1.2908 there is resistance at 1.2984. Next level to watch is 1.3030.
Immediate support is at 1.2835. Below 1.2800 there is strong support at 1.2735 and then at 1.2685. Reaching the 1.2735 area would alleviate the overbought condition.
Oscillators are rising.
Dollar/yen encountered heavy and choppy trading, reversing early gains and closing down on Friday. The medium-term outlook is negative.
The pair has good initial support nearby at 114.20 from a 50-point pivot, which targets 113.70 and 114.70. There
Above 115.00, good resistance remains at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00.
Oscillators are declining.
MEDIUM-TERM: Mixed to slightly bearish
Sterling/dollar closed up for eight straight days and surged again on Friday to reach a 3 Â½-month high of 1.9127. The pair is overbought in the short term but the medium-term outlook is positive.
Above 1.9127, which resistance comes at 1.9235 from the target a Gann level.
Immediate support is at 1.9025. Next level is at 1.8970. Distant support is at 1.8890.
Oscillators are rising.
Dollar/Swiss fell to a near one-month low of 1.2190 on Friday. It closed below the former support from a trendline rising since May 15, so the medium-term outlook is negative.
Below 1.2190, the pair has support pegged at 1.2090, which is also the target of a double top formation.
Above 1.2260, there is resistance at 1.2345. Thatâ€™s followed by 1.2526.
Oscillators are bearish.
MEDIUM-TERM: Mixed slightly bearish
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