NEWS / Foreign Exchange

Daily Forex Market Commentary for July 14, 2006

Friday, July 14, 2006 8:00 GMT
Daily Forex Market Commentary
By: Cornelius Luca, Currencies Analyst, GFT


The dollar edged lower on Thursday amid the quickly spreading newest Middle East crisis, but the pound was the main beneficiary. The US currency should stabilize ahead of the release of the US retail sales and the U Mich reports. It should then attempt to recover.

Euro/dollar
Euro/dollar fell to a near two-week low of 1.2664 on Thursday but should now recover, at least in early trading.

The pair should try to test and break the resistance at 1.2750. If successful, it should then challenge 1.2790 and if this level gives way, then brace yourself for a test of the further levels at 1.2820 and even 1.2862 by early next week.

Since 1.2700 gave way on a closing basis, you should start seeing some long liquidation. Look for another test of 1.2670 and even 1.2630. Distant support remains at 1.2560.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/yen
Dollar/yen nearly edged lower on Thursday and got stuck in an inside range. The key level remains 115.50 from a 50-pip pivot, which targets 116.00 and 115.00.

Below 115.00, support remains the 50-point pivot at 114.20, which targets 113.70 and 114.70.

Above 115.50, initial resistance is at 116.00 and strong resistance remains at116.58.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

Sterling/dollar
Sterling/dollar recovered most of its losses after falling to a near two-week low of 1.8307 on Wednesday.

Resistance is initially at 1.8465. Only a close above 1.8510 would signal a more aggressive rally and then the cable could even retest the high at 1.8538 and even 1.8558.

Support now comes at 1.8390. If the 1.8350 level gives way, then the cable has a chance to challenge the distant support is at 1.8260.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss franc slipped on Thursday, as expected, but got stuck within an inside range. It should attempt to resume its upmove.

The pair has support first to 1.22705. That??™s followed by 1.2225. Distant support comes in the 1.2180 area.

Initial resistance is at 1.2345. A break above 1.2375 is needed to signal a rally 1.2405. Distant resistance looms at 1.2455.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish

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