NEWS / Central Banks

Daily Forex Market Commentary for August 14, 2006

GFT Daily Forex Market Commentary for August 14, 2006
By: Cornelius Luca, Currencies Analyst, GFT


The oversold dollar rallied again on Friday and the strong retail sales report helped. The medium-term outlook is bullish, but the US currency should slip on profit taking today. Follow the sterling/yen and euro/yen higher.

Euro/dollar
The euro/dollar fell again on Friday and the odds are high that a third peak is now in place. The medium-term outlook is only very cautiously positive, and the short term looks positive as well.

Above 1.2760 the pair has resistance at 1.2800. Next area to watch is around 1.2870.

Immediate support is at 1.2710. Below the strong area between 1.2690 and 1.2700 there is strong support at 1.2635.

Oscillators are declining.

NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/yen
Dollar/yen rallied sharply on Friday and this gave more impetus to the slightly rising channel. After some mild pullback, the pair should attempt to pad its gains.

Above 116.36, good resistance is seen at 116.85 from another 50-point pivot, which targets 116.35 and 117.35.

Below 115.72, the pair now has strong support at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00. Further support is at 114.20 from a 50-point pivot, which targets 113.70 and 114.70.

Oscillators are rising.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

Sterling/dollar
The still overbought sterling/dollar made only a meek decline on Friday, and the pair remained stuck in the previous Friday??™s range. It??™s still overbought in the short term and in the medium term, but the risk is on the downside in the short term.

Initial resistance comes at 1.8990. Above 1.9050, good resistance follows at 1.9127.

Immediate support is now pegged at 1.8890. That??™s followed by 1.8865. Next level is at 1.8765 from a Fibonacci retracement level.

Oscillators are mixed.

NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

Dollar/Swiss franc
Dollar/Swiss made another aggressive rally on Friday and the medium-term outlook is cautiously positive. In the short term the risk is on the upside.

Strong support is pegged at 1.2365. Below 1.2335, the pair now has support at 1.2225.

Above 1.2420, the pair has resistance at 1.2480. That??™s followed by 1.2526.

Oscillators are rising.

NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Mixed slightly bullish
LONG-TERM: Bearish

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