Daily Forex Market Commentary for August 21, 2006

GFT Daily Forex Market Commentary for August 21, 2006
By: Cornelius Luca, Currencies Analyst, GFT

The dollar closed little changed on Friday versus all the majors but the pound, which marched lower. The markets lack much direction but the dollar should see some weakness today.

Euro/dollar
The euro/dollar closed unchanged on Friday after the 20-day moving average held support. The pair is still probing the resistance of a long-term trendline declining since December 31, now at 1.2868, and only a close on a weekly basis will turn the outlook aggressively positive.

Above 1.2885 the pair has resistance from a pivotal high at 1.2912. Further resistance remains at 1.3030.

Immediate support is pegged at 1.2800. Next floor is at 1.2740. Strong resistance is seen between 1.2690 and 1.2700.

Oscillators are mixed.

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

Dollar/yen
Dollar/yen traded sideways and remained in an inside range.

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

Initial support is at 115.50, from a 50-pip pivot, which targets 116.00 and 115.00. This level also marks the support from a short-term trendline. Distant support is at 114.20 from a 50-point pivot, which targets 113.70 and 114.70.

Oscillators are mixed.

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

Sterling/dollar
The sterling/dollar fell further on Friday and hit a new two-week low and the selling pressure should pause today.

Initial resistance now comes at 1.8865. Strong resistance follows at 1.8955. Above 1.9000, good resistance follows at 1.9050.

A break below 1.8810 would be negative for the pair. Further support comes at 1.8765 from a Fibonacci retracement level. Distant support is at 1.8675.

Oscillators are bearish.

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

Dollar/Swiss franc
Dollar/Swiss gave up early gains to close virtually unchanged on Friday.

Below 1.2255, the pair has support at 1.2215. Next level is at 1.2190. There is a distant pivotal low in place at 1.2015.

Immediate resistance is at 1.2340. Above 1.2380, resistance is now pegged at 1.2440. Distant resistance is at 1.2526.

Oscillators are mixed.

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

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