Wednesday August 4, 2004 - 14:34:23 GMT
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Daily Forex Commentary by Global Forex Trading
Daily Forex Market Commentary Wednesday, August 04, 2004 8:00 GMT
Daily Commentary By Cornelius Luca
The dollar gave up all of its early gains made against the European currencies, but remained under selling pressure versus the Japanese yen. Its weakness was exacerbated by further evidence that the US consumer spending faltered. Fed Chairman insisted that this is only a temporary event – this remains to be seen. Warnings of possible terrorist attacks against key financial institutions in the US turned out to be a dud as they were based only on four-year old information. Choppy trading should continue but the dollar has a downside bias.
The euro/dollar reversed early losses in choppy trading on Tuesday and kept within recent ranges.
Below 1.1990 pivotal support remains at 1.1950 and a break lower would target the distant 1.1865 level.
There still is good resistance at 1.2100 and a further rally would target the area between 1.2189 and 1.2207.
Oscillators remain mixed.
Dollar/yen extended its losses on Tuesday, when it hit a one-week low of 110.38. The pair should see some respite on Wednesday, but don’t expect a significant rally.
There is initial resistance at 111.00 and a break higher would signal a rally to the 111.60 50-point pivot, which targets 112.10 and 111.10. The 112.10 level should remain off limits today, but if it unexpectedly breaks, then look for a test of the recent high of 112.46.
Below 110.38, dollar/yen has support at 110.00. Key support then remains at 109.15.
Oscillators are falling.
NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Slightly bullish
Sterling/dollar recovered its early US losses on Tuesday with help form the support of its 100-day moving average, now at around 1.8178. The pair is now challenging the top of its wider declining channel at 1.8291.
With the Bank of England expected to hike rates by 25 basis points on Thursday, there is a good chance that the pound will try breaking above the top of this channel.
Above 1.8291, the sterling/dollar has pivotal resistance at 1.8335. Further resistance now comes at 1.8392 and 1.8445. An unexpected break higher would target 1.8480.
The pair has initial support at 1.8177 and a break lower would signal a decline to 1.8150. A drop to the pivotal 1.8083 low remains unexpected. A further decline to the pivotal support at 1.8010 should not be seen.
Oscillators are edging higher.
MEDIUM-TERM: Slightly bearish
LONG-TERM: Slightly bullish
Dollar/Swiss franc trotted into place once again on Tuesday and remained confined to Friday’s range.
Above 1.2840, the pair retains 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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