GFT Daily Market Commentary

Standard bellicose talk from Iran and a tropical storm are no longer what they used to be. Talk of long liquidation of ridiculously high priced commodities and a call from presidential hopeful Obama sent the oil price reeling down and the dollar gained against the pound and yen. But the euro and the franc went nowhere despite seemingly good US data. Tuesday should see a batch of weak report from the UK and the Eurozone, but let’s focus also on the US non-manufacturing ISM. The Fed will leave rates unchanged. Expect choppy trading in FX while keeping tags on the energy and indices prices.

Euro/dollar

The euro/dollar failed to hold on to its early gains and closed flat on Monday. Expect more undecided trading today because countering market fear of the downside and probable weak data.

Initial support comes from a pivot low at 1.5517. Further support follows at 1.5460. Distant support is at 1.5305.

Immediate resistance is at 1.5580. This is followed by 1.5630. Above 1.5700, 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.

Oscillators are declining.

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

Dollar/yen

Dollar/yen closed at the highest level of the uptrend but kept below the high price. The upside is only cautiously favored today.

Immediate resistance is at 108.45. The next resistance is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65.

Support is at 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.

Oscillators are rising.

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

Sterling/dollar

Sterling/dollar collapsed further to a 1 ½-month low on Monday on news the CHIPS's construction PMI fell to 36.7 in July to the weakest reading since the survey began in 1997. Today, the pound could see more weakness form the UK industrial production report, so the downside remains favored.

Immediate support is now seen at 1.9570. This is followed by 1.9540 and 1.9485. Distant support is still seen at 1.9410.

Initial resistance now comes at 1.9630. The next level is 1.9670. Above 1.9760, the next significant level is at 1.9855.

Oscillators are falling.

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

Dollar/Swiss franc

Dollar/Swiss recouped the expected early losses and closed basically unchanged on Monday. Expect more choppy trading.

Above 1.0545, resistance remains at 1.0622. This is followed by 1.0790.

Initial support is seen at 1.0480. This is followed by 1.0435 and 1.0405. Below 1.0370, support now comes at 1.0315. Distant support is pegged at 1.0200.

Oscillators are mixed.

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