Forex Market Commentary for July 28, 2008 by Cornelius LucaFT Daily Market Commentary

The dollar rallied versus the yen on Friday, but closed marginally lower against the euro and the pound. The US data was better than expected and the oil price remained near recent lows, thus providing scope to not drop dollars. The quiet summer trading didn’t shed much light on the next move. There are no US economic reports to be released on Monday. so the dollar should me mixed.

Euro/dollar

Euro/dollar hovered near the lows of its downmove but closed higher on Friday, as expected. My model remains short. But it recovered on the close. The medium-term outlook is now mixed, and the risk remains on the downside.

Immediate resistance is seen at 1.5755 from a Fibonacci retracement level. The next levels are 1.5790, 1.5820, and 1.5860. These are followed by 1.5943. A pivot high remains at 1.6036.
Initial support is at 1.5678. Below the 1.5629 pivot low, strong support follows at 1.5585. The next good level is at 1.5550.
Oscillators are falling.

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

Dollar/yen

Dollar/yen made the expected decline only early on Friday. It then failed to hold below the 20-day moving average and made an aggressive rally to close higher. But the 107.95 Gann pivot is still holding. My model remains long, but the upside bias needs reinforcement.

So, immediate resistance is at 107.95 from a 50-point pivot, which targets 107.45 and 108.45. Distant resistance is at 109.15.

Strong support now comes at 107.35. Strong support follows at 106.75 from a 50-point pivot, which targets 106.25 and 107.25.
Oscillators are rising.

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

Sterling/dollar

Sterling/dollar has been alternating up and down days for nine days, and Friday was a mildly up day, as expected. My model remains short. The slide was overdone and the upside is favored.
Initial resistance now comes at 1.9945. Above 1.9990, the next level is the pivot high at 2.0075.
Immediate support is now seen at 1.9870. Below 1.9815, support is still seen at 1.9760.

Oscillators are falling.

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

Dollar/Swiss franc

Dollar/Swiss made little progress on Friday as well and my model is long. More information is needed.

Immediate resistance is at 1.0405. Above 1.0450, resistance now comes at 1.0475. This is followed by 1.0540.
Initial support is seen at 1.0315. Below 1.0275, support now comes at 1.0200. Distant support is pegged at 1.0140.
Oscillators are rising.

NEAR-TERM: Mixed to slightly bearish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Mixed




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