Friday August 13, 2004 - 13:17:11 GMT
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Daily Forex Commentary by Global Forex Trading
Daily Commentary by Cornelius Luca, forex analyst, Global Forex Trading
The dollar advanced versus the pound, consolidated against the yen and slipped against the euro and the Swiss franc on Thursday. An apparent weak US retail sales report hit the dollar briefly early in the day before it became clear that the previous month’s revision turned the report to around where it was expected. The dollar should try to advance on Friday, but be careful of possible bumps in the road from the trade deficit, PPI and University of Michigan reports.
The euro/dollar failed to hold on to its early gains and trimmed these profits to consolidate edged further around the 200-day moving average at around 1.2233.
Any decline still targets the 1.2190 and then the 1.2156 levels. If the decline accelerates, which remains unlikely, then the euro/dollar will challenge the 1.2118 level. A test of the 1.2000 area is very unlikely.
The first resistance remains at 1.2302 and a break higher would signal an upmove to 1.2318. Further resistance remains at 1.2342 from a Fibonacci retracement level and a break higher would target 1.2378.
Oscillators are mixed.
Dollar/yen fell saw choppy trading on Thursday, but ended little changed, still within an inside range of 109.82 to 111.88. The weak GDP report on early Friday helped the pair rally – albeit still within those boundaries.
The key resistance remains the 111.60 50-point pivot, which targets 112.10 and 111.10. Further resistance comes from a pivotal high at 112.46.
Immediate support is now seen at 111.00 and then at 110.80. That’s followed by the 20-day moving average at 110.60 and a break lower would target 110.00. Distant support remains at 109.15 from the 50-point pivot that targets 109.65 and 108.65.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Slightly bullish
Sterling/dollar experienced choppy trading on Thursday, but it managed to exit from last Friday’s range of 1.8292 to 1.8464. The pair is taking an increasingly negative tone.
Any further decline should test the initial support in the 1.8175 area. A test of the pivotal low of 1.8083 is now likely.
If the sterling/dollar recovers, then look for a test of the 1.8300 area and then of the converging 20- and 60-day moving averages at around 1.8326. Above the pivotal top of 1.8393 there resistance remains at 1.8483 from a Fibonacci retracement level.
Oscillators are edging lower.
NEAR-TERM: Mixed to slightly bearish
LONG-TERM: Slightly bullish
Dollar/Swiss franc headed lower on Thursday but remains within last Friday’s range.
Any recovery still faces resistance at 1.2620. A break higher would signal an upmove to the 100- and 200-day moving average at around 1.2670. A close above this area would signal that the downmove is over and a test of 1.2772.
Below 1.2500, the dollar/Swiss franc has support at 1.2468 from the Fibonacci retracement level of the July 16 – August 4 upmove. An unlikely break lower would challenge the 1.2400 area.
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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