Thursday July 22, 2004 - 12:48:29 GMT
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Daily Forex Commentary by Global Forex Trading
Daily Commentary By Cornelius Luca, forex analyst, Global Forex Trading
The dollar made a massive rally on Wednesday following Fed Chairman Greenspanís optimistic vie on the US economy and the heightened odds that the pace of hiking rates will accelerate. This upmove is overdone, so the dollar should now slip on profit taking before any further strength can be seen.
Euro/dollar collapsed on Wednesday to a 19-day low of 1.2210 before trimming losses. While the pair should bounce on Thursday, the negative momentum remains in place because of the closing below the support of the 20-day moving average, now at around 1.2297.
Below 1.2210, support comes at 1.2146. A break lower would call for a decline to 1.2110. A slide to 1.2066 is unlikely on the day.
If able to break back above the 20-day moving average, then the euro/dollar will climb back up and test the resistance at 1.2340. Next barrier looms at 1.2390. There is a pivotal resistance level at 1.2460.
Oscillators are edging lower.
NEAR-TERM: Mixed to slightly higher
Dollar/yen smashed its way from Mondayís range and surged on Wednesday to a five-week high of 110.30 before trimming losses. The pair should now slip further on profit taking before resuming gains.
Above 110.30, there is resistance at 110.95 from a Fibonacci retracement level. Key resistance looms at 111.60 from a 50-point pivot that targets 112.10 and 111.10, but these lofty levels should remains off reach.
Key support now comes at 109.15 from the pivot that targets 109.65 and 108.65. Below 108.08, key support remains from the 107.95 50-point pivot, which targets 107.45 and 108.45.
Oscillators are rising.
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Slightly bullish
Sterling/dollar plunged on Wednesday to a 15-day low of 1.8320 before trimming losses. While it should se some relief from profit taking, the pair retains an overall weak tone while below the 20-day moving average at around 1.8426.
Above 1.8426, the pair has resistance at 1.8480 and a break higher signals a test of the 1.8570 area. The pivotal top at 1.8769 should not be seen today.
Any further decline will face good support at 1.8277 and a break lower would signal a decline to 1.8185.
Oscillators are declining.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bullish
Dollar/Swiss made another powerful recovery on Wednesday and reached a three-week high of 1.2578. Following some profit taking sales, the pair should climb further.
Above 1.2578, the pair has pivotal resistance at 1.2675. There is another pivotal high at 1.2701, but dollar/Swiss franc should not stretch that high on the day.
If the pullback accelerates, then the dollar/Swiss franc will fall to test the support at 1.2440. A break lower would 1.2380. Below 1.2310 there is support at 1.2230 and the pivotal support at 1.2204.
Oscillators are rising.
NEAR-TERM: Mixed to slightly lower
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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