Forex Market Commentary for July 31, 2008 by Cornelius LucaGFT Daily Market Commentary

The dollar rallied early Wednesday, but then pared gains amid a $4 rebound in crude oil prices, but despite a recovering stock market. Thursday will see the release of the US GDP and Chicago PMI reports; the former has the ability to boost the dollar, but Friday we’ll be at the ready for the non-farm payrolls. The dollar looks primed for a pullback, but take your cues from the GDP report.

Euro/dollar

Euro/dollar recovered from a five-week low to close virtually unchanged on Wednesday, and my model remains short. The medium-term outlook remains bearish, but a doji seems to be in place, and the short-term outlook is bullish.

Immediate resistance is seen at 1.5630. The next resistance is 1.5770 from a Fibonacci retracement level. The next levels remain 1.5790, 1.5820, and 1.5860. These are followed by 1.5943. A pivot high remains at 1.6036.
Initial support comes from the pivot low at 1.5523. Further support follows at 1.5460. Distant support is at 1.5305.
Oscillators are declining.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen consolidated near a five-week high and closed basically unchanged. My model remains long, but the short-term outlook seems slightly bearish.

Support remains 107.95 from a 50-point pivot, which targets 107.45 and 108.45. Distant support follows at 106.75 from a 50-point pivot, which targets 106.25 and 107.25.
Immediate resistance is at 108.45. Distant resistance is at 109.15.

Oscillators are rising.

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

Sterling/dollar

Sterling/dollar reversed from a near three-week low, but my model remains short. The medium-term outlook is slightly bearish, but more strength is likely today.
Initial resistance now comes at 1.9840. Above 1.9880, the next significant level is at 1.9970. There is a pivot high at 2.0075.
Immediate support is now seen at 1.9790. This is followed by 1.9747 and 1.9690. Distant support is still seen at 1.9650.
Oscillators are falling.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Slightly bearish
LONG-TERM: Bullish

Dollar/Swiss franc

Dollar/Swiss surged to a new high for the upmove but gave it nearly all back by the close. My model is long, but the downside is favored today.

Initial support is seen at 1.0440. Below 1.0370, support now comes at 1.0315. Distant support is pegged at 1.0200.
Immediate resistance is at 1.0522. Above 1.0545, resistance now comes at 1.0622. This is followed by 1.0790.
Oscillators are rising.

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



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