Tuesday August 3, 2004 - 14:07:45 GMT
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Daily Forex Commentary by Global Forex Trading
Daily Commentary By Cornelius Luca, forex analyst, Global Forex Trading
Warnings of possible terrorist attacks against key financial institutions in New York City, Washington and Newark exercised only a fleeting drag on the dollar, particularly versus the euro and the Swiss franc. However, the dollar remained under selling pressure against the yen and the pound on Monday. The ISM-manufacturing report came in as expected, so the good report had little impact on the dollar. The US personal income data on Tuesday should not carry much weight. Choppy trading should continue as vacations limit trading volume.
The euro/dollar encountered further choppy trading on Monday and kept within Friday’s boundaries after failing to break higher and giving up all of its gains.
Below 1.1990 pivotal support is still in place at 1.1950 and a break lower would target the distant 1.1865 level.
There is good resistance at 1.2100 on Tuesday. A rally further would target the area between 1.2189 and 1.2207.
Oscillators remain mixed.
Dollar/yen marched lower on Monday and the pair is approaching pivotal levels.
It broke below the 110.96 Fibonacci retracement level on a closing basis but still needs to conquer the 110.50 level. There is a psychological level in place at 110.00. Key support then looms at 109.15.
The key resistance level on Monday moved to the 111.60 50-point pivot, which targets 112.10 and 111.10. The 112.10 should not be touched today, but if it unexpectedly crumbles, then look for a test of the good resistance at 112.06 from a Fibonacci retracement level and then at its recent high of 112.46.
Oscillators are falling.
NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Slightly bullish
Sterling/dollar has clearly bottomed for now at 1.8083 last Thursday, and managed to retain most of its gains on Monday after breaking out of its declining channel. This should not last for long, but cable remains the strongest of the European lot.
While its recovery smashed the resistance at 1.8250, this level still holds on an intraday basis. Further resistance is now at 1.8335. An unexpected break higher would target 1.8414.
The sterling/dollar has initial support at 1.8190 and a break lower would signal a decline to 1.8150. A drop to the pivotal 1.8083 low is unexpected. A drop to the further pivotal support at 1.8010 should not be seen on the day.
Oscillators are edging higher.
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bullish
Dollar/Swiss franc recovered early losses on Monday but kept within Friday’s range. The pair is now struggling at the top of its rising channel.
Above 1.2840, the pair still has good resistances at 1.2916 and then at 1.2957 from a Fibonacci retracement level. A break higher would signal an aggressive rally to 1.3085.
Dollar/Swiss franc has immediate support at 1.2710 and a break lower would challenge the nearby, but tough, 1.2685 area. A slide to 1.2600 remains unlikely.
Oscillators are mixed.
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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